Depends on where you live and when the mortgage boarded. I've seen some really nightmarish scenarios where the property value has dropped more than 75%. The phrase "negative equity" is not a media creation by any means...
Obviously that's not true in your case (hopefully!), but one of the as-of-yet-unplayed cards in the whole housing market collapse is whether or not the PMI companies are going to survive all the defaults, foreclosures, and short sales, and if so, at whose expense.
From a purely consumer standpoint, yeah, PMI is bullshit, an unnecessary pad-on. Most people do not default, period. But as a "business decision" on the part of the mortgage underwriters, it's not as obviously exploitative as it might appear at first glance.
Which is not to say that it's ultimately still not exploitative. But "business" is all about making that money and "protecting that investment", doncha' know...