Remember, you get a year's warranty with purchase. If the model has a defect that will show within the year. If not, it will probably last for three or four years without trouble. The chances of a serious problem (other than drive failure) within the second or third year are pretty slim, and if there's not a problem Apple keeps the cash. If you're anything like me in two, three or four years you'll be eyeing a new notebook anyway, and the $349 you blew on Applecare would go a long way towards a brand new model.
If Applecare was less-- like $100-- I'd say it was good insurance. But right now, it's just a cash cow for Apple.