Canon U.S.A. Power shot s3 imaging chip went out Internet

I purchased a canon a powershot s3is 6.0 Mega pixel camera.  The camera is three years old.  The camera is used 12 to 15 times per year.  The camera was purchased brand new from Target stores.  The camera stopped working in the view finder you could see the icons on the screen however the back ground was black. It was the image processor was no longer working.  I contacted canon and they said I could ship it in and they work fix it for $139.00.  I was told I also could upgrade the camera to a new better camera that was rebuilt for resale as it had been returned.  This was $100 to $500 to update to a camera that was rebuilt.  My question at that point is I purchased a camera that consumer reports recommended.  The camera was not used as a commercial camera and was very well taken care of.  Now the image processor goes out after three years and they want the camera back so they can fix and sell the camera again. Pretty good gig if you ask me.  If I do not want to do that I can pay the $139.00 for fixing a imaging processor.  I guess I wonder how the main function of a camera can go out three years from the sale.  The camera has never been abused or even over used.  I feel canon should replace the camera at no charge.  If I would have read consumer reports closer I would have realized that Canon doesn't rate very well when it comes to camera issues with these types of issues.  I currently now do not have a camera. Canon wanted me to buy to refurbished.  Know my question is why would I buy a refurbished camera so I can turn around in three years and send that one in to buy another refurbished model.  The only way I would ever purchase another canon is if they stand behind this camera and fix the imaging processor.  I purchased this camera on Name and Brand and I want the company to stand behind the defective issues of the camera as I would expect from a company.  I'm also starting to second guess why they sell refurbished products. I'm guessing this happens a lot.