Damaged Driveshaft Questions

Leave that decision up to the buyer.
Just show them the gouge, and if they want it, they'll buy it.
You might have to sell it at a discount, but it will still bring ALOT more than scrap price.
You'll get .50c a pound for it scrap, and that is only if you have it down to clean aluminum (all non-aluminum parts stripped off).
Assuming the 16# rating of the shaft is the weight without any parts on it, and I doubt it, but just assuming there is 16# of bare aluminum there, you'll get $8 for it scrap. I bet you'd have a line of folks willing to give you $50 for it, knowing full well it is gouged.
I would set the selling price at $100, and tell folks the price is low because of the 'damage', and see what happens.
If it doesn't sell quick enough, put an "OBO" behind the price and entertain offers.

Someone could always have the gouge TIG'd up with aluminum if it bothered them.