I hate this idea,it is causing more of a problem than its trying to fix!
At my calculations (likely wrong), if the maximum domain somebody would want to make (20chars), you could make 280million domains per TLD (mostly nonsense). So .com can have 280mil, .fr can have 280mil, etc. Wouldn't opening up the TLD system make things worse? (assuming not all TLD buyers allow people to freely register domains at a reasonable price)
At the current time, ICANN can open a new TLD every once in a while and allow all the domains to be taken. And they can do this thousands of times at least until things get silly with 5 letter+ TLDs.
I really hope this doesn't happen!
I think there has been a great misunderstanding with this scheme due to how its been reported by the likes of BBC News - applicants will have to submit business plans and demonstrate a technical capacity to maintain DNS servers - I bet they will have some pretty strict requirements by the time it's finalised, and I'm sure they will heavily scrutinise all applications.
It's not like any old Joe can just set up their own TLD overnight.
While you won't be able to get the paypal TLD, I'd be surprised if paypal.shop is appreciably harder to get than paypalshop.com