If that was a Ruger, they would fix it no questions asked. I would insist S&W fix if it cost you that kind of coin. Don't let them get away with this nonsense.
Beretta is another mfgr who mostly refuses cosmetic repairs under warranty. Don't know about Colt. Sig, FN, H&K & CZ don't seem to have cosmetic issues. Not saying never, but I don't really hear about them.
Could be S&W thinks their poop don't sting? Or got too big for their britches? I have a news flash for Smith: My last 4 guns have been 3 Colt revolvers & only one Smith. I doubt I'm the only one headed in the direction, IMO. I refuse to do Taurus or Ruger.
Smith is gonna fool around & drop to the #4 or #5 gun mfgr if they're not careful. Maybe even lower?