The policy even assumed some amount of semi-bad faith behavior, the thinking was their return policy was also a bit of a charity program for the needy and destitute[1] (a Costco member lost their job and so returns a bunch of items for cash, etc). What they didn’t anticipate was the sheer number of people who began acting in bad faith (and the deflationary nature of electronics making it especially tempting), it was too much to bear.
It’s a shame the policy is gone. There was really no peace of mind quite like it, knowing that if your device failed after years of use, but still due to a defect, you had recourse. And for poor people, it was a godsend of a program especially (and not because it could be abused, but simply Costco providing a service that anything you buy will work as advertised)
[1]source: some internal training I received back in 1998