These things sell online for around $80, so I'm guessing their cost is around $50. So your $1.07 plus $45 "activation " fee covered their cost. your 2 yrs of insurance will pay for 4 more , that's not including the deductible I'm sure they'll charge you.
Did you already have a data plan with them? If you seriously got locked into a 2yr data plan with them simply for this, you MUST return it. You'll never end up fulfilling the agreement, and let it go. It will damage whatever credit you have and you won't be able to get a phone with att anymore. The equipment will never last the 2 yrs you'll be paying for it.
These type of deals have about a 75% contract fail rate. But since it's cash positive in month 1, they lower the credit restrictions on these, making it even more enticing to the poorest of our society, who end up paying more for phone service down the road since they have a now have a record of non payment.
As mentioned, a kindle fire will load videos and pictures, cost you the same cash up front, with no data plan. Use wifi at a local coffee shop or at home. How does a data plan benefit you?