The heuristic fails for precisely the reason you state; there is a parametric family of solutions which makes it fail.

People often use heuristic arguments to predict the number of integral/rational solutions of bounded height to diophantine equations. These heuristics are often true, provided one allows a small margin of error given by ignoring possible parametric families of solutions which make things go wrong (often called "special subvarieties"). This is exactly what is happening here.

This philosophy is present in many conjectures and research problems in the modern study of diophantine equations, such as Manin's conjecture, the Bombieri-Lang conjecture, the André–Oort conjecture,.....

Another example close to my heart where this happens (and closely related to your case), is the case of cubic surfaces. Take for example the Fermat cubic surface.

$$x_0^3 + x_1^3 = x_2^3 + x_3^3.$$

Here the circle method predicts that there are around $N$ primitive integral solutions of bounded height. However this wrong, as there is a parametric family of "trivial" solutions
$$x_0=x_2, \quad x_1=x_3,$$
which yields around $N^2$ solutions of bounded height.

However, once one removes these trivial solutions, plus other obvious ones, it is expected that the circle method is *almost* right. Namely that there are around $N(\log N)^3$ primitive integral solutions of bounded height. This is a special case of the [Manin conjecture](http://en.wikipedia.org/wiki/Manin_conjecture). Unfortunately one does not know this for the Fermat cubic surface, but a lower bound of the correct order of magnitude in this case is a recent nice result of [Sofos](http://arxiv.org/abs/1402.0303).