Hey, I said the service was slick, not necessarily the cost.
To be honest though, I wouldn't expect any manufacturer to do cheap repairs once something goes out of warranty. There may be few exceptions to the rule, but I've never been lucky.
I actually tried to get my first (out of warranty) ipod repaired through a variety of people, including the well regarded ipodrepairs website. They still tried to charge me over £230 for a hard disk replacement as well, meaning it would have been as cheap to buy a new one.
I reckon the excuse used to be that those small hds used to be reallly expensive, although if you can source one yourself for cheaper, it's not meant to be impossibly difficult to repair yourself