I am very happy with my miners from Bitmain but I think this upgrade kit is way too expensive, you could sell your S1 and just buy S3, the difference in price is .12BTC which is about $60, not worth the hassle of doing the upgrade but if you have a broken S1 or non-functional S1 then perhaps it's worth it.
my 2 cents.
Agree. And remember; if you buy an S3 you can still use your old S1. It will still run profitably for a while, especially if underclocked.
I also think that if Bitmain sold them cheaper then you could have a scenario where these hardware/software smart miners could assemble an S3 equivalent type miner cheaper so I think the price was set so that it would not hurt the S3 Sales.