I don't keep enough cash to go out and replace my daily driver, in kind, today. Even if it was someone else's fault and they're eventually required to remunerate me for the loss, that can take months.

People don't like the cost, but they like the benefits when they need it.

AppleCare still sells well without a legal obligation. People tend to be risk averse, and prefer to pay a little bit now to avoid paying a lot later.