Yeah that's the problem, there's no way to guarantee that I didn't just scan another NM copy I have then slip in the damaged copy. At the same time, that's why I want something to cover my ass: there's nothing to say this guy isn't trying to get me to replace a damaged copy of his own for him. I guess that's why we have feedback, I'm letting my reputation speak for itself in this dispute. I would not risk a spotless record for an $8 card with an indentation in it. It's clear the card IS damaged, but all I know is that happened after the card left my possession. I honestly just think the guy's trying to pull a fast one, as you said, he only has 16 feedback or something so I don't really place that much trust in what he's claiming.
That's the big downfall of internet trading in general. It's really hard to prove anything. Like someone above said, even with DC you could have a trader claim that a) the cards arrived but were damaged or b) the cards arrived but were missing the most expensive cards. Unless you're willing to videotape yourself packaging the card, walking to the mailbox, and dropping it in, you can't 100% cover your ass with anything.