Fred makes very good points, as have most of the others. At the risk of stirring the pot...
Warranty coverage of this failure is a good thing. But I think the issue is not warranty but is cost of replacement.
ES suspension is a good thing - superior to manual - as long as it proves reliable.
I have ridden the Ducati Multistrada with Skyhook and the KTM 1190 Adventure with their active suspensions. These are superb systems, as long as they are reliable.
I have nothing against electronic control systems, as long as they are reliable and don't break the owner at repair or replacement time or drive the new cost beyond affordable.
Here is my experience with FJR shocks:
FJR #1 - Compression and rebound damping was going away at 35K; a low-miles Gen I take off went on and I rode it to 70K when damping was going, going... Another low-miles Gen II take-off went on.
FJR #2 - Damping was going at 30K. At 35 K the shock was losing oil and damping was gone. Another low-miles Gen II take-off...
FJR #3 - Only 11,500K, damping is fine, but a back-up low-miles Gen II take-off is on the shelf.
Admittedly we ride two-up (we carry some extra poundage - most of us do at 60+ but are not excessively overweight) and loaded most of the time on some pretty gnarly pavement. We have bottomed the rear shock (anyone who has ridden the west shore of Lake Koocanusa knows what I am talking about).
I understand the basic shock on the Gen III works better than Gen II or I. Does the damping hold up longer, too? Is the ES shock the basic Gen III shock with the stepper motor attached to make adjustment automatic/electronic as opposed to manual?
Failure and wearing out are also two different issues. I would consider a leak, bent rod or snapped mount a failure. Degraded damping over time is probably wear-and-tear. I change shocks on my truck every other set of tires for that reason - damping deteriorates with use.
Now, when the ES is out of warranty (factory or YES) and there is a failure, the owner will pay for a new shock or repairs. That's a lot of lucre (be it $3,300 or $2,500) for a shock. When it simply wears out, the owner will also pay for a new shock. Or, as Fred stated, go with aftermarket, also expensive.
What if the shock wears out (no leaks but damping degraded) before the warranty expires? Will this be considered a wear-and-tear item like brake pads? If not, how do you "prove" the shock is worn out? You'd have to get a dealer tech to agree (good luck).
As for rebuilding the unit, who can do this? Yamaha? If rebuildable, what is the cost? Perhaps 60-70 percent of new? What is the downtime?
A lot of questions will be answered in time. In the meantime, we will all ride and enjoy.
I know the ES owners are happy with their systems and rightfully so, defensiveness aside. And I hope they are reliable and last a long, long time, especially since I may have an ES some day. I've enjoyed the discussion.