I ship to whatever address is listed, confirmed or unconfirmed. Frankly it means nothing anyway. There is no such thing as a confirmed address. It could be confirmed to where the person used to live, not where they live now. I've never had a package come back. When I ship, if I get a warning that the USPS database can not confirm this is a valid address, I'll email the buyer just to make sure there isn't an error.
If it's the buyers fault for having an incorrect address listed in their profile, my feeling is they are responsible for paying for it to be shipped a second time. It wasn't your fault that you sent it to the address listed. That is the buyers responsibility to have his data correct. It is NOT "partly" their fault, it is 100% THEIR FAULT.
Simply explain this to your buyer that the package was returned because their data was correct, and they will need to pay shipping again. Offer an option to refund their money if they don't want to have the item shipped a second time, but explain that the shipping amount for the failed attempt will not be refunded.
File on ebay for a "mutually agreed not to sell the item" so you get your Final Value Fees back. The buyer will not have any strikes against them for doing this.