I allow returns and "destroy" for Ingram. I haven't seen much of returns but I don't sell a lot of Ingram books, mainly Zon.
The % feature is rather annoying. I'm sure it's a carry over from classic paperback trad publishing. I've played with it but it remains, to me, confusing. It also can lead to the really irritating price drop phenomena where Amazon will drop the paperback below ebook price. This will then drop your ebook price. Because of this, wheras I used to play around with low prices on Ingram, I tend to price high on Ingram to not affect Amazon. Which then leads to less Ingram sales. 
I think D2D acts more like Amazon and doesn't do the % thing, but I'm not sure.
If you want to use D2D or Amazon because it's less of a hassle, that's a fair argument and I don't think anyone would say anything. But the arguments you've presented for not using Ingram aren't really all that sound and are likely just some bad information that's been passed on for so long it's turned to fact.
Amazon
does the discount for extended distribution. You just don't see it, it's built in. Create Space better explained this discount, but it's still there with Amazon, just at a fixed rate and slightly hidden. At least at Ingram, you can control for the discount.
The discount isn't a carry-over from traditional publishing, it's the wholesale price. A physical bookstore needs to make a profit on the books, you need to have a wholesale price they can buy it at to sell it at retail. Some books can handle a low discount. I have a book series that will sell no matter what and I price it right at the market value so it's competitive with the closest comp. If the store is guaranteed to sell them in X days, they'll take the lower discount, especially after the first customer asks for any book in the series. I can easily pop the 30-35% discount on that series.
I have other series that can't support the low discount because they're just more like all the others out there. So, I push up to the 40-45% discount, but lift my retail price by a dollar. My goal for a print book is about $3.50, anything higher is golden, but I try to hit the $3.50.
As for the cost of printing going up, well that's a world-wide issue. It's not Ingram being greedy (I believe Amazon's printing prices went up too). The cost of paper has skyrocketed, Ingram likely held on to the price for as long as they could, but have been open about the price increases, explained exactly why the increase is happening and have even gone so far as to put the increased cost to print into the calculator way ahead of the actual increase so people could price books accordingly (also meant they got a bigger profit if they paid attention to their invoices.)
As for quality, Ingram still wins, hands down. The books from Amazon always seem to struggle to last very long or always have some printing error, either missed pages, badly trimmed (and this isn't about margins, this is about an angled page), and unreliable glue on the spine. I'm just as likely to get an off printed book as I am to get a decently printed book. The book series that supports low discounts also has books that are frequently handled and have to sustain pencil and eraser marks. Because of the trim size, I can't use Amazon at all so I can't do a direct comparison, but for as heavy use as those books get, they hold up remarkably well. Two years on for one book that has been handled almost every day and had the spine rolled with the front cover flipped back, and it is no worse for the wear. A few crinkles on the cover in the spine, but overall, it's as good as the traditionally published book that's it's closest comp. I honestly can't say the same for any of the books that came from Amazon. I would have been to say the same for the books that came from Createspace though.
That said, I am fairly certain that for extended distribution everyone uses Ingram. THey just farm it out, through them. So whether you go through Amazon, BN, or D2D, if you distribute to anywhere except the main store, your books will be printed through Ingram and whoever you distribute with will take a bigger chunk than if you go direct. It's why so many suggest you go direct when you can print, and use Ingram for eveywhere else.
