A $350 bag is likely fancy enough to have a "lifetime" or some such guarantee and the manufacturer will most likely pop a replacement wheel in the mail if you call. But, even if they charge, $25 seems pretty high. I'd be very happy with $25 to replace a suitcase wheel.

And, even if the bag is made permanently unuseable, the most you get is its fair market value unless you carry insurance which provides more. Two years of travel at $350 probably doesn't result in much more than $25 for the entire case.