Well the online merchant vs. brick and mortar debate is ongoing and applies to every product not just monitors. But the savings are huge and at this level of savings I think it's worth it. And if my experience is any help, the one we got was better adjusted and setup than the vast majority I've seen anywhere. And that goes for my very expensive Sony G500.
The recertified monitors are most likely not "used" per-say but as you said were problem children. They use the parts they can or fix the problem part, and then are remanufactured and tested to spec. At this time it's the same as if it first left the factory. It is done at the same factory and is actually tested more than the retail line. Let's put it this way. If you have a problem with a retail monitor and send it back, they don't give you new retail boxed stock, they send you one of these. So I'm sure they want to send you a monitor that is BETTER than the one you sent back. They want to make sure that the one you get will last, and is trouble free.
There is no such thing as a perfect monitor, and if you hang around here enough you'll see all of the reports of full price retail monitors that are completely messed up. And then they need to do the whole swap around and wait. And this is at FULL PRICE!! And then they end up getting a factory refurb anyway, as a replacement.
As for your questions about pricing, the epinions page I linked has a list of the cheapest merchants the search engine could find. They average close to twice the price, and I know for a fact the shipping(even ground) will be about double.
What I would do is get the 1 year warranty add-on. This is just for piece of mind. If the monitor has a problem other than what normal wear and tear will cause, it will surface in a year's time. These better monitors also are meant for a longer service life than the cheapies. So I'm sure you'll get at least 8 years out of it, if it is trouble free the first year? In fact it most likely will last longer.
Also think of it this way, you are saving about half. So at the worst(I'm sure it will never come to this) you'll end up spending what you saved on a repair, or another monitor. Or by the time it has trouble, there will be better and cheaper monitors available.
The odds are in your favor. If it is damaged due to shipping, send it back and have them ship a new one. If it has a problem within 90 days have KDS take care of it. Buy the warranty and use it a lot, if the monitor has a fault it will most likely surface well before this period. But this is worst case, and you are still on top. The most likely scenario, is you get a great monitor, and save a bundle, and it lasts an extremly long time.
The one we got was GREAT! It came factory sealed, in great condition. It was indistinguisable from a retail unit. It even smelled new(that new plastic smell, and the way a monitor smells when you turn it on for the first time). The cosmetics looked new, and the packaging was as I said, the same as if you walked out of a store and opened it up off the shelf. If you didn't "know" there is no way to tell.
Like I said I'm jellous, his monitor does just about what mine can do, and cost 1/5th the price. Other than the slightly smaller screen and the upper res's and refresh rates I never use, it looks and performs the same.