Package Has Disappeared in USPS System

I recently purchased a modestly expensive audio product over the Internet, paid for by credit card, to be shipped to me via the USPS Priority Mail system, with tracking and insurance.  The vendor, who will go unnamed at the moment out of respect for past good service, emailed me that the package shipped on 20 December, although the package did not show up in the USPS system until about 27 December.  Being a patient guy, I figured that the USPS is slow in keeping up with demand over Christmas.  On about 28 December, the USPS tracking system said the package had been received, had been sent to a regional distribution center, and had been shipped on from there.  However, and now it gets "interesting,"  on 31 December, the USPS tracking system said that the label had been created but that the package was not in the system.  In other words, the package had "disappeared" from the USPS system.  At several points in this saga, I contacted the vendor to express my concern, especially after the package disappeared from the USPS system; their response was that I should be patient and await further developments..

On 2 January,I contact the vendor, suggesting they initiate a missing package complaint, file an insurance claim, and requested that they send me a replacement product, assuring them that I would promptly return the first item if it ever showed up. (Coincidentally, on the same date I read a reputably-sourced news item about rampant theft by employees in the USPS system--hardly reassuring.)

The vendor's response again was that I should be patient--in spite of my pointing out that the USPS had obviously lost the package--and await further developments.

However, in spite of normally being a very patient guy, I think, with two weeks having passed and the USPS tracking system now saying they haven't received the package that they previously acknowledged having, it is time for the vendor to send me a replacement item.

I will never use the USPS system for product shipment if there is any other viable alternative.

Several questions come to mind:

1) How long is reasonable to wait for a package that should have been delivered in one to three days?

2)  At what point should a vendor realize that good customer service means providing the customer with a product they shipped with tracking and insurance?

3)  Would it unreasonable for me to tell the vendor that if they cannot provide a replacement product within a few days, I would like my money refunded?  (I am prepared to contest the charge on my credit card for non-performance.

4)  Am I being unreasonable?