Apples and oranges. Warranty, repair and insurance are very different in what they do and do not cover. If you don't care for insurance, that's your call to make but warranty/repair won't cover loss/theft which has already been mentioned in this thread.
As for the cost argument that is, again, a personal call. Not everyone's in a situation where a fallback device is an option or even desired. Full retail is fairly high for the iPhone.
