We are past making sense now,...and that's fine.
Couldn't agree with you more.
Warranty is not a contract.
A contract cannot be binding when only one side signs it.
I, as a consumer, have absolutely no say in it.
Warranty could be a contract but it is not necessarily.
Mainly, it is a promise of honor to honor a product in case it is defective.
A warranty is not exactly a contract, however, in most cases (including yours) it acts like one.
When you agreed to purchase the camera, the warranty that came with it was one of the terms. You agree to pay $1500 to the retailer, and the retailer delivers to you a camera, AND conveys the warranty from Canon. Canon promises to fix defects in the camera, free of charge, for ONE YEAR. NOT IN PERPETUITY.
You do have a say in your warranty coverage. You could, not buy that camera. Or, you could purchase supplemental coverage (Squaretrade for example). More coverage = more money. Less coverage = less money. Just like auto, or home insurance.
If you buy a refurbished camera, the warranty period is less (90 days for example), so you expect to pay less for a refurbished camera than new. If you buy a used camera out of warranty, you expect to pay significantly less, because it's used, and comes with no warranty. As you can see, the warranty itself actually has a monetary value, which you already paid for, and didn't use. That's not Canon's fault, that's your fault.
You are outside of the warranty period. You have absolutely no basis
for a complaint.
So I understand your frustration but you have very little recourse aside from b*tching about it on a forum. Canon has in fact honored their part of the warranty - in fact they've gone beyond that, by offering you a discounted repair - you are the one who is asking for too much - you are asking for a free out of warranty repair.
I don't know what the cause of the problem was - when I first read that it was in a waterproof bag for essentially two years, the first thing that popped into my mind was condensation issues - but who knows. It could very well have been a faulty circuit board from the factory, as you suggest. It could have been someone dropping the box from a shelf at the retailer. It could be a hundred different things, and when you're out of the warranty period, it doesn't actually matter what caused the damage - you are responsible.
I am sorry that seems to be a difficult truth for you to accept but pretty much no one on this thread shares your anger and your outrage because you are the one who has a lot of responsibility in this matter, and you don't seem to be accepting any of it. You cannot be helped, because you are not accepting of help.
I wish you good luck, and I would not blame you if you decided to switch back to Nikon, or Pentax, or mirrorless, or whatever. I can understand this experience has soured you on Canon. However I'll leave you with a warning - in the same situation, a different company would have done the exact same thing as Canon. You are not going to get better service from Sony or Samsung or anybody else.