I've had a couple instances were a product failed well outside of 1 year. I could have warrantied through the manufacturer, but REI handled it for me and I had a replacement in 5 minutes. That outstanding service is no longer.
Sure, if I take care of my boots they last a while. Should I get my money back or have them resoled for free if the glue fails 2x or 3x after the manufacturer said it was guaranteed? Probably not. If the DWR on my rain jacket can't be refreshed, or a plastic connector on an extendable hiking stick fails after a thousand miles in the mountains?
A year feels like a big change from "forever". Maybe 2 or 3 would have made a better headline, but again you've got people that will have learned about the program (I've been a member since 2003 and never knew about the lifetime guarantee...) and will pick stuff up with the express purpose of beating it up then getting it replaced or returned. That's not good to me as a co-op member, either, because it puts pressure on the company to raise prices to cover the cost of returns and repairs.
Not in theory, but it was sustainable if it was really just a mutual contract of quality transactions.
The majority of REI members wouldn't have returned a worn out pair of boots, I suspect. But then the economy crashed. :/