On the other hand, this does make me wonder if there ought to be a threshold for damage. A small scratch to a panel can result in a very expensive panel replacement, and the car is still totally driveable and most people renting won't notice or care.
It would be one thing if minor damage could just be "buffed out", but it can't. But when the only repair option is an entire expensive replacement of a component, is that really fair? Do people really need their rental cars to be perfectly pristine? Are they willing to pay these exorbitant damage fees in order to ensure that?