Honestly bro, just keep calling back. I know it's not "right" but look at it like this. They have to split hairs when it comes to deciding who gets what repair and why. A cracked screen in the vast majority of cases would indeed suggest that it was dropped... except for situations like this where it wasn't dropped YET it cracked.
The one time I spoke to an ASUS rep, he made the mistake of flat out telling me the Nexus 7 is perfect and there are no defects. Listen, bub... I work in IT. I work with electronics all the time. I get to play with a whole array of gadgets, computers, you name it. To say a device is "perfect" is something you can never guarantee. There are always lemons. Period. That comment sent me over the edge, and I immediately asked to talk to his supervisor since I thought it was extremely inappropriate he flat out tell me "This device is perfect" when I'm explaining to him I have an issue with it that I didn't cause.
At any rate, this is basically what I told ASUS the final time I talked to them. I said if my unit is not repaired under warranty, I will simply call continuously until it is. I said I didn't drop this device. If I did, I wouldn't be sitting here as agitated as I am. I said unfortunately for ASUS, I do a lot of side projects in the evening at my computer. I can easily multitask by sitting on a headset with Google Voice talking to you guys while jamming to a little Pink Floyd in the background. I will do that with a smile on my face for weeks on end. I spent time to earn money so I can buy this product. If ASUS is going to jip me by not supporting it when something like this happens that I did not cause, I'll do whatever I can in my power to waste as much of ASUS's employee's time as possible. After all, time is money, right?
Ironically, the last time I spoke to ASUS was the one time I got a rep I actually liked. I'm not kidding. Somebody I would totally have a drink with. He understood my frustration and at least made me feel a little better by saying "dude I'd be doing the same thing as you if I were in your shoes." He stressed though that it's hard to 100% justify your case over the phone because as far as ASUS might know, you might not even own a Nexus 7, so committing to anything concrete based on the customer's description alone is an impossible sell. I said I fully understand that, but what bothers me is the fact I'm reading ASUS is giving users the ultimatum to pay ~180 or hit the road to fix their devices. He said I understand, but you can only speak for your device in situations like this. He also said that due to the extensive notes on my account that it would work in my favor since it seemed apparent I was well aware of the design process of these devices.
Sure enough, 3 hours later is when ASUS sent me a tracking number.
At any rate, those of you who ARE experiencing cracked screens, just keep calling. I mean, really. The Nexus 7 is a fabulous device, and I was in total facepalm mode when this happened because I feel as though a little better quality control by ASUS would have prevented it. Nonetheless, if I get my device back and it's fixed, I'll be a happy camper. Sure, I had to fight. No, I shouldn't have had to do that. It is what it is. Stay tuned for my opinion of my newly repaired N7 when I unbox it tomorrow... (assuming I can get it tomorrow - missed the shipping today)