Well, I'll tell you why Microsoft isn't getting hammered on the failure rate. First of all, people have been complaining about this for months already and the press has reported it, so it's not exactly a secret anymore (and MS has certainly taken a bit of criticism over it). The second reason is much more important, and that's Microsoft's decision regarding the matter.
Along with bumping up the warranty to 3 years, they're also willingly taking a $1 billion hit to fix the problem. As you probably heard, they've said that any system that's had failure problems in the past will be fixed for free, and that if consumers paied money in the past for such services, they'll all be refunded. And by the way, that applies to he entire world, not just the US.
To put all this into proper perspective, there hasn't ever been a worldwide recall, if you will, of a video game console (as far as I can tell). Not only have there never been console problems as widespread as this before, but even if there were, as a big a move as Microsoft took here would obviously cost the company a lot of money.
In the case of Microsoft, money isn't as big a problem for them as some other companies, but regardless, it took them real courage to take such a bold step here. And do you want to know why they did this? Because they don't want to lose the consumer confidence in their company, which has helped sell all of their big products over the years, not just Xbox stuff.
To answer the question of why people aren't giving Microsoft a hard time anymore, I think its because people (like myself, who also had a system failure issue with my 360) recognize what a selfless and compassionate act this was. Many big companies (this isn't limited to the game industry) tend to claim that they have their consumers interests in mind, but tend to be driven by greed and do whatever they can to make ever so slightly more money than the large sum they may have made in previous years. Unlike some companies, Microsoft's decision has them doing the exact opposite, which in effect, humanizes the company, proving that they care about their customers.
If you haven't read read Gamespot's interview with Peter Moore yet (he's the head of the Xbox division), I suggest you do so at the link below.
http://www.gamespot.com/news/6173660.html?om_act=convert&om_clk=newstop&tag=newstop;title;11Compared to some earlier interviews I've read of his, where he came off as slightly cocky, here, you really get a sense that he's very serious about the problems they're having and that for him personally, he's deeply dissapointed that people have been having such problems with their systems.
In this interview, just like in his press release about the cancelling of the Dreamcast version of Shenmue 2 in the US (this occured when he was the head of Sega), Moore comes off as very understanding of the gamers' frustrations, which in turn helps him be trusted by the consumers in his respective position, but also helps the Microsoft company as a whole.
And although it may be annoying to have to send your system back through the mail, ask yourself this question? Which is worse? Having to send your system back without being sure that it'll work fine from then on out, or sending it out, waiting a bit, and then being able to get back to playing again (and if not, they'll give you money back, if applicable, and keep working to fix the problem)?