OP - How you get treated by DL will likely be determined by your status and the amount involved. At less than $250, DL is unlikely to put up a fuss. At more and without status, you will likely see the cost of the repair or the fair market value of the bag. FMV is not the replacement price.

This one is likely to be resolved quite easily. Just DL know that the replacements offered are not to your liking and that you would prefer to replace the bag yourself. Unless the $250 you quoted is way out of line with the apparent value of the bag, you will likely see a check in fairly short order.