You can't void a warranty that you do not have. If you are out of warranty, that means you are out of warranty. And not everyone can afford $199 dollars to get their phone fixed. Also, getting the phone replaced covers you for 90 days, which means after 90 days you'll have to pay the $199 dollars to get it repaired/replaced again.
Also, buying a new phone = buying a new warranty. So hypothetical situation.
Guy A and B both have broken iPhone 4s'
Guy A pays the $199 for an OOW repair.
Guy B pays $50 for a TP repair.
Both devices then get broken screens 100 days later.
Guy A pays another $199 for another OOW repair.
Guy B buys a new iPhone 4s for $549.
At this point, Guy A has payed $398 and Guy B has paid $599.
Guy A and Guy B both have their Sleep/Wake buttons break 95 days after their last incident.
Guy A is now at $597 and Guy B is still at $599. Guy B is still covered for 269 more days, so if he has any issues that aren't caused by accidental damage he pays nothing. For an additional $69 he's covered for an additional year, even. Guy A, however, still has his OOW phone and is not covered, and cannot purchase the AppleCare Protection Plan. So Guy A will have to continue to pay the OOW repair fee each time his phone breaks until he buys a new phone. Even if Guy B buys the APP, if they both have another issue with a button or something Guy A will have then payed more for his device than Guy B paid for two devices.
I do not know if they replace it if it will have a 1 year warranty on it, but I do know that the APP rolls over and that the limited warranty rolls over onto replacements. So I would think that if they replaced the device for a $199 fee that the warranty information (in this case the 90 day limited warranty) would also roll over. Dunno, gotta ask Apple about that one.