iPhone 7 plus water damage

Hey guys. I've visited the Apple Store 2x in hopes of finding some limited warranty coverage to replace my phone, but at the end of the day... the LCi being triggered means my phone is "water damaged." The screen flickers now and has an ugly offcolored spot in the dead middle of the screen under the glass. The phone is new and always kept in a case in new condition. The only resolution offered for me would be a paid replacement ($350) or purchase of Apple care ($100) and then the $100 USD water damage replacement.

It seems almost offensive that someone walks in and gets a free replacement for a smashed screen but my phone that isn't properly functioning anymore whilst being used well within the parameters of its "water resistance" will require a minimum price of $200 for a replacement.