Though wrong address delivery isn't all that common, it does happen. Unfortunately the common carrier confirmation of delivery is generally accepted as proof of delivery by most courts, because it's the best evidence available. If courts can't rely on that, there's nothing left.

I understand ebay's position, though it's a shame they can't or won't assign a human to actually look at the nuances of the issue, especially since there's equally reliable evidence of receipt of the item back at the sender. I do know that ebay sometimes makes an accommodation refund in gray area cases where it's impossible to know for sure.

I ship thousands of small packets all over the world, and never bother with insurance, finding that it's more cost effective to allow a reserve for loss in transit. If stuff is lost or misdelivered I replace the item based on my customer's word, and "pay" for it out of my reserve. So far my loss expense averages less than 1/10th% of the value of my shipments.