No they aren't. Almost a rip off
My thompson drive had died as well. Or rather, it reads very badly and randomly gives dirty disk errors in games (backups and originals). The only game that doesn't is Halo 2 (maybe because it is mostly cached?).
I never replaced it though. I have an upgraded HDD and play off of that. The drive works to stream the game to the hard disk, and that's all I need it for.