I'm trying to figure out exactly what you're saying there...
When determining the inherent reliability of the system, sales numbers and rationale for failure are irrelevant. All that matters is what percentage of consoles are returned for being defective. The percentage determines your chance of being sold a defective product, after all.
The "idiot defense" doesn't work, all console owners are of average levels of stupidity, therefor if it applies to one system then it applies to all systems, and is therefor irrelevant to a reliability comparison. So unless you're willing to assert that 360 owners are inherently more stupid and/or shifty, you'll have to concede this point I'm afraid. The 360 may well be more vulnerable to rough treatment, that in itself can be considered a design flaw and must be taken into account.
What idiots do to their consoles have absolutely nothing to do with the failure rate of said console. I could take a bat to my Wii and claim that it was defective and unreliable by your logic. I could let it sit up against the wall covered with dust, and that wouldn't be anything defective with my unit, only that I'd be an idiot for putting it in a position that would almost guarantee to overheat and brick my unit.
Failure rates indicate how many of the product is faulty coming off the line, how likely you are to get a lemon. Any units that fail because of the stupid actions of their owners, and not because of a defect, don't apply to failure rate. If I buy a 360 with a 30% failure rate, I should expect there's a 30% chance for it to fail through no fault of my own; but instead there's a lower chance because that figure has been inflated by idiot users. That discrepancy could make the difference between a sale or not; I might not be willing to risk my money on a 30% failure rate, but maybe I would on a 15-20% failure rate.
The only way user fault would apply is if you only look to the number of returned consoles, period. Warranty's don't cover shit like dropping your camera, or splashing water/coke all over the vents of your TV, because there was nothing wrong with the product until you got stupid with it.
If idiots are the reason Xbox 360s fail, why is PS3's failure rate under 1% by this very same test? Are 360 owners inherently dumber than PS3 owners?
Well, we'd get a more accurate gauge of the PS3's failure rate if it would actually sell. Hard to fail when they're sitting on store shelves, never having been plugged in. Nintendo's stuff is nigh indestructible, though.
Apparently no one bothered to read the line about how assuming a fixed % of users are idiots, there's more idiots with 360's since they've sold more. Also, given that some people bought a PS3 for use only as a blu-ray player, they'd be much more likely to have a proper setup and keep it in a well ventilated area; plus dropping that much on a console, you're going to take care of it. 360 owners are mostly college kids who wanted the next halo, and those dorm rooms aren't exactly the best place to prolong the lifespan of any device.