Hi bherm18,
This isn't an Apple support board. This is a community support board. If you want to talk to an Apple representative about you're case number you'll need to go back to the Apple Store and talk to a manager or call AppleCare (800-APL-CARE in the USA). If you'd like to provide feedback about the policy that frustrates you, you can fill out the form at apple.com/feedback.
As far as your issue goes, I know that it can be frustrating when you install an update or do something that doesn't seem to be necessary and something else bad happens instead. In your case it sounds like you had to pay for the repair because you were out of warranty and your device was physically broken. I'm not implying that you did anything wrong, but your device did physically break if they needed to replace the device to fix your issue. It isn't the software update that caused the problem, it just revealed the hardware issue that was already present.
It is possible for your hardware to continue working for a short time after something goes bad internally, only to stop working when the software/firmware that controls it is replaced and the device tries to reconfigure that hardware component that went bad. While it seems like the software update caused your problem, it was really just a bad circuit or component inside the phone that didn't update along with the rest of the device and then couldn't come back on when rebooted. That's unfortunate, but it would have been covered at no cost if your device was still under warranty.
Apple provides a full year of warranty coverage on all their devices, which is much higher than the industry standard of 90-days. And they offer an extended warranty for the iPhone for a second year of coverage for less than most repair costs that also would have covered your device. If your phone is more than 2 years old you may have the option to upgrade through your carrier to a new device. Overall, it's still unfortunate for your device to have a hardware problem after less than three years, but it does happen. And if your out of warranty or you didn't get the extended warranty that's also unfortunate, but it's not really reasonable to expect Apple to cover repairs for longer than the already provided full year when you have a ton of other options, even outside of Apple for insurance or replacement of your device if it breaks.
