If my iPod simply stopped working, I'd assume some sort of manufacturing flaw occurred and would be happy to get a full refund (and probably buy a replacement with that refund.)
An exploding device is another story, especially being my kid's device. I'd have a hard time keeping silent in these circumstances. If the iPod really did blow up and jump 10 feet, I could just imagine the damage it would have done had it been in a person's pocket. Thats a more of a safety concern, than a nuisance if you ask me.
That said, considering the type of failure (IE explosive). If I were Apple I may have re-worded my generic response and told the individual to allow me to collect the defective unit for analysis, and then follow up accordingly once the failure mode had been properly analyzed, rather than asking them to be silent before actually bothering to find out what caused the problem.