My cable yellowed and the length of the jacket started to crack and crumble within two years. This had nothing to do with the failure mode you mentioned, and it was not uncommon in my Ph.D. program, where MacBooks were used heavily for statistical analysis and other number crunching. I suspect that the heat of actually being used for long periods of intensive computing was enough to degrade the cable jacket. This is a failure, and probably a calculated trade-off based on the (arguably reasonable) assumption that most Apple users don't actually do real computing.
Apple replaced them quietly, except for mine because I was too lazy and didn't bring it in until the cable shielding was frayed. This set off the (totally arbitrary) biases of the Genius Bar, and they refused to replace it. When I pointed out that the cable jacket had cracked already anyway, and the fraying was just an inevitable side-effect, the guy got his supervisor. The supervisor came back and completely reversed the story, saying that they wouldn't replace the cable because the plug had a small, completely superficial, ding on it, which he counted as "abuse." The only abuse was from the Genius Bar, and directed at me. Assholes.
Apart from their weird small-minded bouts of vindictiveness, I still like Apple. But this was fucking ridiculous.