Well, there actually there are 3 things that make me mad about PayPal:
(1) Bad process (users have to create accounts/ passwords before they can checkout)
(2) Rejection of some credit card numbers (happened to some of our customers, due to their PayPal's security measures - the cards worked on other sites)
(3) Blocking of merchant accounts (happened to us twice. Only way to resolve the issue was entering my drivers license + id number, which were not accepted - spent several days trying to get it fixed by phone)
You're absolutely right that one could probably avoid issue (1) by choosing their $30 plan and integrating it into our own website. But I am pretty sure (2) and (3) will still apply, which is nothing but horrible if you are a small business.
Another question: Does anyone have an idea why there is no competition in the market so far? I suppose there must be kind of regulatory issues, although they must be even harder in the US where there is competition.
[AND thanks for your code-offer - I think I'll get that done on my own anyways ;) If not, I'd be happy to get back to you ;))]