He asked for $1800 and accepted 80% plus the $200 filing fee, so he got back $1640, so it cost him around $360. --I'm guessing his deductible would have been in the $100-200 range, so, yeah, he ate $160-260 rather than spend the time going through arbitration, but it's perfectly fair for him to consider the cost of his time in determining whether or not it made sense to continue fighting.

In the end he still comes out ahead since it looks like a normal sized electric water heater runs around $500 plus the cost of installation and repairing any damage from the leaks.