What was C-3PO talking about when he said, “That’s funny, the damage doesn’t look as bad from out here.”

Question

^{NOTE: Specifically looking for some in-universe explanation; canonical or “legends” is fine. Lots of discussion of this specific line exists online, but nothing seems to go past idle “armchair speculation”; hoping something more solid and substantial can show up here.}

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At the beginning of the original Star Wars (1977) film, the Rebel Blockade Runner (Tantive IV) is captured by an Imperial Star Destroyer (Devastator) near Tatooine. R2-D2 and C-3PO escape that whole mess by leaving the the ship in an escape pod (aka: lifepod). As their escape pod spirals down to Tatooine, C-3PO states the following:

That’s funny, the damage doesn’t look as bad from out here.

What damage to what doesn’t look as bad from the vantage point of the escape pod? The shooting script for the film (Revised Fourth Draft - January 15, 1976) frames the dialogue as such:

INT. LIFEPOD

Artoo and Threepio look out at the receding Imperial starship. Stars circle as the pod rotates through the galaxy.

THREEPIO: That’s funny, the damage doesn’t look as bad from out here.

Artoo beeps an assuring response.

THREEPIO: Are you sure this things safe?

Is C-3PO somehow referring to the Star Destroyer since that’s what we see on screen (see screenshot) as well as being referenced in the script itself? If so, why is C-3PO interested in the damage to an Imperial Star Destroyer? Is his droid eyesight somehow so strong he could see the Rebel Blockade Runner captured in the docking bay of that Star Destroyer? Heck, was C-3PO even aware of what ship he was on to begin with and maybe thought the Star Destroyer was the ship he was on?

Answer 1

I've always seen this line as a joke, by the way, playing off of C-3PO's relative ignorance of space vessels and technology in general.

The damage in question is almost certainly the damage that Tantive IV logically must have suffered at the hands of Devastator prior to the capture of the former. The movie opens on a battle between the two ships, and we see R2-D2 and C-3PO being pretty much thrown around the interior of Tantive IV from the impacts of Devastator's attack. It's reasonable for C-3PO to imagine heavy damage being suffered.

Prior to Captain Antilles shutting down the main reactor, we see a shot from Devastator cause a large explosion in the middle of Tantive IV. It's doubtful Antilles would shut down the engines unless some critical system were damaged enough that he had to. They did not want to be captured at any cost.

It's unclear whether C-3PO doesn't seem to find the damage looks that bad because he is looking at the underside of Tantive IV, or they are too far away from it to see the damage, or he mistakes Devastator for Tantive IV, but the joke plays either way. There is a long history of 3PO getting it wrong all throughout the canonical and non-canonical "literature" (yes, I called Star Wars "literature" but I chickened out and put it in quotes), although this would seem to be the first obvious example of him being clearly ignorant of things that are not his specialty.

Out of universe: Note that the scene must have been shot before it could have been composited. That means that Daniels would have read his line in filming while looking at a blank space that might have been blue or black, or he might have actually overlaid it afterwards in ADR. Either way, the intention of the script could have been different from what we see because neither the screenwriter nor Daniels would be able to see the final composited shot. When the shot was composited, it might have turned out differently from how it was imagined (or even storyboarded).

Either way, as a joke the line plays regardless of whether he mistakes Devastator for Tantive IV or he just doesn't understand what damage would look like. The fact that it wasn't edited out, either by muting the dialog track or cutting the shot entirely, strongly supports the idea that it was meant to be a joke. Either that, or when editing of the scene was done, a line that wasn't meant to be a joke made Lucas and the editor(s) present laugh hard enough that they left it in.

Answer 2

C-3PO, in the earlier scene indicates that he's aware that the main reactor of the Tantive IV has suffered a critical hit.

“Did you hear that?” C-3PO said to R2-D2 as the Tantive IV’s engines powered down. “They’ve shut down the main reactor. We’ll be destroyed for sure. This is madness!” - _{^{Star Wars: Junior Novelisation}}

As the escape pod leaves the vicinity he remarks to his companion that despite this, the Rebel vessel seem to be largely intact.

The escape pod continued to plummet away from the Star Destroyer. Inside the pod, C-3PO peered through the small circular window that was the vessel’s single viewport. Gazing back at the rapidly receding view of the Tantive IV within the Star Destroyer’s main hangar, he commented, “That’s funny, the damage doesn’t look as bad from out here.” - _{^{Star Wars: Junior Novelisation}}

So to answer your specific questions; C-3PO is not referring to the Star Destroyer; His eyesight is evidently sufficiently good enough to be able to make out gross features of the Tantive IV from that distance and he's fully cognisant of what ship he's on.

Answer 3

I believe you've misinterpreted what a low tone beep from Artoo means. Please allow me:

Artoo beeps an assuring response OMG, you're an idiot.

C-3PO is referring to the Star Destroyer, that's why Artoo berates him.

At soundboard.com there's an audio clip titled Laughing R2D2, at the end of which are these same two "words" Artoo uses in the escape pod. If Artoo is giving C-3PO an "assuring response", I've misinterpreted him my entire life.