By shruggin off, I mean action taken - sending the replacements via USPS, which is perportedly the problem in the first place - solves nothing. THe only action that will fix that problem is sending via another carrier, or the problem is not solved.
You think waiting 21 days for something is reasonable? I think if you take a quick poll here you will find you are mistaken. 21 days is very UNreasonable to me at least. In fact, anything more than a week means there is a problem. This is 2006, not 1906. I would estimate that 99.9% of everything I order comes in less than 1 week. That is the norm, not 21 to me.
If 95% of your customers (is that US only, which is what we are talking about here?) opt for the cheapest option, is it made clear to them at that time, that the cheapest option is a KNOWN problem? No, it is not - again, that is your responsability. If you want to offer that option, knowing full well that it's a MAJOR problem, causing huge delays, lost shipments, multiple threads every single quarter - then make a big, bold statement about it on the shipping page. You will undoubtedly find that your percentage of USPS orders plummets.
Personally, I think that statement is very misleading. You know full well that some people don't know about the problem, but you quote a figure as if they do. Sure most choose it, but only out of ignorace. Inform the customer and THEN you can make a statement about the percentages.