Unlocked iPhone hit with 1.1.1; standard "invalid SIM" error.

Can Apple repair it? (Not "will" they.)

Is there any reason why Apple would be incapable of repairing a phone with this issue? I know that it's a violation of the warranty, blah blah blah. I mean, technically. Did the AnySim-type tools do something that would prevent Apple from correcting the issue?

I'm checking my stupidity on this, but I have to think that Apple themselves would be able to completely erase everything on the phone (all firmware, all software, baseband, etc.) and load it fresh. Am I wrong?

I'm just trying to figure out if Apple is being a dick for absolutely refusing repairs (even paid non-warranty repairs), or if they're legitimately incapable of doing anything (which I have a hard time believing, but you folks know more than me).