My friend had his Nexus 7 in his pocket (as he always had done) and just the process of sitting on the couch caused enough pressure to destroy the screen.
Google / ASUS provided no support and he just went and bought a whole new device (he was told the price of repair was basically the same as replacement).
Unlike most of the devices I've seen when the screen was cracked (really just a hairline crack across the face), it became completely unusable.
Yeah I have had that experience about 4 times now, like you said, when cracked its completely useless. I broke the first one by sitting the device on the top of a stack of books and research material and then proceeding to pick that bundle up. My thumb holding the nexus 7 and that was enough to put a split from corner to corner. I have given up on the device and Android. I went back to using my old ipad 1 which has been dropped and thrown about for 2-3 years now and not even a scratch or buff on the back and certainly no cracks or chips on the screen. I made the mistake of getting a nexus 7 for my brother and both parents and they have ALL had problems with it (each was about £209 in the UK). They are all getting ipads now.
My guess is that replacements are new devices (which replace your old device), while repairs are not new devices , but instead your original device, repaired.