Your packing was definitely not adequate. Your bass in its factory box was hand loaded into a truck at Rickenbacker, and it stayed in that truck until it was offloaded by hand at Sweetwater. No forklifts, no throwing packages, no switching vehicles. That's all it was designed to do. It's not designed to be adequate for shipping by USPS, UPS or Fedex. That's why Sweetwater ships it to you in an outer box.
If you had shipped directly through UPS or Fedex like you did, your claim would have been denied outright. Your packing definitely wouldn't have met their standards. I suspect USPS would have done likewise. Sure, the bigger box would have cost you more, but that's not their problem. It's up to you to charge enough to cover it.
Whether or not Reverb self-insures is completely irrelevant. You chose to ship through Reverb, you're required to deal with them on the claim. They have the option to repair. You're fortunate to have this much, considering your packing job.
Reverb is a marketplace, you have a store on Reverb. You are definitely the vendor. That's not subject to debate, it's a matter of law.
It's sad that the bass will never be good as new, but that's a risk you take when you ship something, whether it's a special issue or a run-of-the-mill bass that's easily replaceable.
One more cardboard box would have stopped the forklift blade huh? HAHAHAHAHA OK
I just sent a Ric from Oregon to St. Paul in its case in the factory Ric box and it WAS accepted by UPS and since it wasn't stabbed with a forklift it arrived perfectly.