PayPal dispute for Aardvark USB3 sale

I was shocked when an Aardvark USB3 computer audio interface with fragile protruding parts that I purchased through PayPal arrived in the mail in padded envelope instead of box.  It is entirely inconsistent with any reasonable care a seller should have when packing sensitive electronic items for sale, rather like sending an uncooked egg in a bag.  It seemed to me like some kind of 'passive aggressive' move, or maybe a $cam 2 play 'blame the shipper' for pre-existing damage?  That sort of thing has happened to me in the past & I have had to dispute charges and file police reports for fraud, etc..  Weight and abuse from adjacent packages (sometimes quite heavy ones) while in transit is easily transmitted through the protruding 'knobs' down the flimsy plastic shafts & into the tiny weak 'potentiometers' within the unit & can damage them.  It would not have cost any more to put the thing in a little box for shipping, but that is not even really the issue.  The problem is the seller is playing 'blame the shipper' as if it is my fault for not buying shipping insurance, but in fact the shipper isn't even the issue because the item was improperly packed.  The seller is also claiming that because they did not make a profit they do not owe me a refund.  It's pretty silly stuff really.  They obviously DO owe me a refund because it is the seller's responsibility to properly pack items, not the shipper, & not the buyer.  Here below I have attached a photo of this product model.  I also have video evidence of myself opening the package and inspecting the contents, revealing the damage to it.  I have suggested to the seller that in the future they use boxes for shipping sensitive electronics, not envelopes.