I am actually in the opinion that you should get it back and sell it on ebay. However, I am very curious about the so-called design flaw that they mentioned. Did they offer any words of advice on how to ship it later on? What could you have different differently? Are these machines THAT fragile that they can't withstand UPS? Oh and BTW I NEVER ship UPS unless I have to. They are the reasons why I got a 2 year old 19" CRT replaced with a 22" brand new CRT. It left NEC warranty warehouse fine and came to me with holes in the box. UPS workers are uneducated uncaring trolls who really do not believe in taking care of your cargo. To the minimum wage workers they don't need to worry about your stuff. FedEx and DHL on the other hand have been great to me and for me.
UPS has never paid a claim to me, although I've managed as the receiver to come out ok. FedEx shipped a new laptop I sold on ebay and the box was scuffed and they were willing to replace the machine, even though there was no damage. Now that's a good company.
This would outrage me, but I wouldnt waste my time filing the claim. I doubt theyd pay.