Declared value should be 100% up to the person submitting the game. Your game was declared at $1k, but is worth $100k and gets damaged at Wata or in return shipping? You only get up to $1k in compensation. And if Wata says it cost $60 to grade my game, it doesn't matter if it's a $1k game or a $100k game, do the job and don't jerk people around.
If they want to inform the customer that they might want to add more insurance on the return shipment, fine. But eliminate the appearance of scumminess by involving the shipping company directly, or at least pointing the customer to the shippers web page with an official statement on exactly what the cost of insurance is, based on value.
-ud