Apple offers a replacement for hardware issue of Stainless Steel series 1 watch for $249, Is it fair? I think I mgt b better off buying series 3.

Apple Watch 38mm Stainless Steel 1st series, sport band. My watch went dead, not working, won’t pair, etc. I took it to Apple Store and got tested on Sat. I was told this might b a hardware issue and store can’t help and I need to send my watch to Apple repair Ctr. A guy from Apple store calls me 3 days later, and said my watch is ready, pls pick up. The guy said Apple decided to replace the same watch (technician can’t fix the watch) but I need to pay $249. I am not sure if this is fair. I think I would be better off paying little more and get series3, instead of paying $249. Should the watch performs well as it should, I would not have to spend this extra $249. I purchased this watch for $500 (?) Brand new 1.5 years ago. This product had been discontinued a year ago I believe. Any advice for this situation please. If I have extra $249 to spare and need a new watch, naturally I would go for latest series. These products depreciate crazily and I probably could get this series 1 for ab $150-$180 May be. If I decided to not get a replacemen, that watch is gone for nothing.