I have never seen a rule in the ASA book that allows for an extra inch of batter's box to be added for the mat. So no, you do not lose an inch to the mat. That inch is there because on a properly manicured field where the batter's box is level with the plate, the ball can bounce an inch or so inside of the plate, and not actually touch the plate (the edge of the ball is over the plate) and be a strike.
Your 12 inches of shoe do not matter. You must keep your foot entirely inside the box, not partially in the box, so you are not getting screwed out of 12 inches there.
So we have gone from 17 inches you are getting shorted, down to 4. If the box was drawn properly, the outside edge of the box will be 42 inches from home plate. You actually can stand with your feet on the chalk line. The line is part of the box if drawn correctly, so the umpire was wrong in not allowing you to stand on the line.
As far as the measurement of the box drawn, you might have an argument there, but seriously dude, it is a couple of inches. If you have a tape measure to pull out, then maybe you have a case of calling the director over, or playing under protest or something. But until you are able to take an exact measurement of the box, you pretty much have nothing here.
You probably could protest the ump not allowing you to stand ON the chalk line of the box, but if you are unable to hit a slowpitch softball from a position where your heels can be up to 38 inches away from the edge of the plate, something is wrong.