If they examine the failed tire and make a determination that it failed due to overloading, under inflation, excess speed, hitting a curb, or road hazard, those types of failures are not covered by warranty and the pro-rated value is irrelevant. Their offer of a cash settlement is an accommodation to maintain customer satisfaction (or at least say they made an effort).
I know that some people would say that they always determine that the failure was caused by something not covered by warranty, implying that since they have a vested interest in that finding, their findings are suspect.
As far as I can tell, tire experts, manufacturers, distributors, retail outlets, insurance companies, and the government all agree that almost all trailer tire failures are caused by one of those excluded items - not by a manufacturing defect. So the tire companies have a lot of support for their findings.
On the other side of that argument, almost every owner is ready to swear that they weren't overloaded, under inflated, driving too fast, and never ever hit a curb or other road hazard. Therefore it must be a manufacturing defect.
The only way I can think of to resolve these conflicting views is to put the failed tire in the hands of an impartial third party to determine cause of failure. That would be NHTSA. And if they find manufacturing defects, they take action to help all consumers who have the defective tire.
So why doesn't everyone send their failed tires to NHTSA? Well, I'll hazard a guess that the $125 from the tire distributor is more meaningful to them than a possible determination that there's a manufacturing defect. After all, that $125 will help pay for the new tires that are needed right now.
There are a lot of people on forums who assert that these tires have manufacturing defects. If some of you put your failed tires in the hands of NHTSA, they might prove you right.