Like I said already, I personally don't see any current 360 mods as something worth doing in favor of losing the warranty. Playing copied games for a current gen system that you can go out and buy RIGHT NOW at a 24 hour store is lame IMO. Support the system and developers while you can. Save the copying for when you can't buy a game or system any more.
That said if we are counting up the cost of the console itself vs. the money saved from copies, at least use a 360 model that people actually buy. The arcade unit is a POS that no one in their right mind would buy. Everyone has either the $450 elite or the $300 "platinum" model. Plus you have to factor in the cost of the mod itself, any costs to rent the games you will pirate, the cost of the blank media and if we are really being picky the costs of the machine/software you use to copy and burn. I'd say that's a little more than 5 games. 
I don't want to sound like I'm criticizing you because I'm not. I'm simply trying to clarify my posts as I don't think you understood my point. To me the warranty isn't worth losing in favor of a mod considering the likely chance it will break. It seems as if many opened/modded systems are still being replaced. I think MS has had so many come through that they just check the error code, send a new/refub back to you ASAP and then deal with the defective hardware later. They've lost so much at this point with the hardware failures and their focus is now quick replacement...they aren't going to mess with checking for subtle mods.
When replacing a unit, there is no difference between the arcade unit and any other, with the exception of color.
It would be stupid to pay more for a different unit, when you already have all the extra stuff that comes with the them.
Cost of the mod?
It is a firmware flash. As long as you have SATA in your PC, there is no cost for the mod.
Blank media cost $2 a piece retail, and can be found cheaper.
5 games at $60 a piece = $300
5 copies at $2 a piece + Arcade unit replacement $280 = $290
If the argument is that you should support the developers, and not be playing copies than fair enough. That is not at all the same thing as not having value though.
If you are going to be playing copies, than at worst the cost of a replacement system is going to set you back considerably less then you would have paid to buy the games you play.
Chances are that you will be able to fix it yourself with the $10 x-clamp replacement though.