It's probably a lot better than that on the REI accounting side of things, so it's definitely worth arguing from a "it's probably not as bad as it seems" standpoint indeed. Here's why....
Outdoor equipment, at least the major brands sold by REI, typically list for 45-55% of the retail price. Indeed, if REI sells an item at $100 they likely only spend $50 to acquire it to sell, meaning they're breaking even, at least from an inventory cost perspective, by simply selling one for every one that comes back. Even with inventory taxes, sales, and costs associated with personnel to sell said equipment (i.e. all the overhead sunk costs), they're still probably doing quite well.
So yeah, while it's clearly stated that you can bring the stuff back and if they make an offer they can't be disappointed when people use the system to its fullest, I think a lot of people feel like the practice is similar to the person you invite to a party who drinks all the booze, or eats all the cookies, or really does make themselves feel at home. You say it to be polite and offer the majority of people with shame the option to be more comfortable, but you don't expect lots of people to really take full advantage of the offer.