I received a book today shipped in an inside out Priority envelope.  My PO mentioned that it was illegal to do so. 

I never thought of doing something like that.... I'd be too afarid of getting in trouble.

 What if she was a real jerk?  Could I have been asked to pay the difference?

yes you could have been asked to pay the difference at the PO but you could also have refused it and sent it back and made the sender pay the difference.

you might want to let the sender know that using priority envelopes, even outside, is illegal in the PO eyes and that if they catch it they could up the price and she will either get the book back or be prepared to compensate for the receiver paying the postage

Wow, you must have a sweety of a PO person, they should have charged you the Priority rate. Please PM the sender and let them know they cannot reuse Priority packaging without paying the Priority rate. Most of the time, if it is caught, it will arrive postage due for the higher service.