$3500 seems steep..........have you shopped?........ultimately its best if you can get the warranty from the dealer that's your planned primary sevice point........but a little research & leverage wouldn't hurt. If it were $2500 I'd be saying take it w/out doubt.

I just paid for engine replacement in an 02.........fluke, she popped a timing chain.....when that happened, I said to myself, any M96 based cars I'd have in the future I'd either flip before they're off warranty or buy extended.
There will always be 'flukes'. But today's M96 based engines are better.....continue to improve. My replacement engine came with many improved parts, the beefier cam shaft bearings, many pieces with current 997 part numbers.

 

It's not just "these engines", Porsche replaces turbo and GT3 engines en bloc instead of repairing them as well. Unfortunately it's the way they do business these days.