Well, they've been doing it for over a century. They also make more knives than just about everybody (except Buck maybe, I don't know). Because of this, they can afford the customer service they give (they seem to replace free any knife that you break). There's probably a ton of rejected knives and parts that don't pass their QC, but they're big enough that it doesn't matter, and they don't need to sell sub-par stuff to make ends meet.
It's kinda like comparing Mag Light and Surefire. If you break a Surefire, they fix it. If you break a Mag Light, they send you a new one. But for every Surefire light sold, Mag Light sells a zillion. That's the way companies work at the ends of the spectrums.
It seems though that it's inbetween where problems happen most. People don't buy enough for them throw out the bad ones or give free replacements for broken ones. But they don't (can't) sell them for enough that free, no-questions-asked repairs are economically viable.
I don't know if I'm talking out of my ass or not, this just seems to be a trend I've noticed. Low-mid price products get sold the most, and people tend not to even bother with sending in bad/broken ones. What happens when you break your Timex? Throw it out and get another, right? What if it's a Rolex?