PayPal really needs to establish some sort of transparent, independent, review board for these things.
The US should force its banks to implement better EFT with consumer-initiated direct-deposit and direct-debit, marginalizing the whole Credit Card / PayPal ecosystem.
Believe me, I've "been there, done that." We've tried numerous PayPal alternatives at our non-profit, including MoneyBookers, Google Checkout, etc. The one that brings in the donations is PayPal simply because it makes it the easiest to part with your money. It doesn't feel like your giving real money away, just points!