2. Sellers think it's less reliable/more likely to get lost. I would like to see some evidence of this. When a package goes awry in the states, it's bad luck and USPS' crummy service. But if it goes awry overseas, it must be because international shipping is untrustworthy. I don't see any logical causation in that. In my experience, the UK's royal mail and the French la poste are two of the most reliable postal services in the world. I've never had any trouble with Australian mail, either. I do admit there seems to be a pattern of products shipped to Canada getting lost/stuck indefinitely at customs, but that's one country. No need to throw the baby out with the bathwater.
There are two issues here: First, not all mail systems are equal. You might have no trouble with the UK's Royal Mail -- probably won't -- but I wouldn't roll the dice on Canada, much less Italy. There are all sorts of countries with unreliable mail systems, and I don't know enough about what's what to say which is which.
Two, I don't even find the domestic mail consistently reliable. I've had a dozen letters and a package misdelivered to my house in the last two weeks. Had I been so inclined, I could have some free merch right now.
When I ship domestically, I insure every item above, say, $50, often out of my own pocket. But I can't do that for overseas buyers. If one of our longtime UK regulars wanted me to send an item the cheap way, and agreed not to hold me responsible if it didn't arrive, I'd probably do it. But a guy with 20 posts in Korea? No way.