We all know the horror stories of frozen PayPal accounts but I can't say I can blame PP given the scope of what they have to deal with when transferring money and dealing with regulators/government.
It's reasonable to assume a flood of cash would be enough to set off various alarms.
It is a shame you have to be so wary of PayPal, but in this case it did lead them to do what would be the right thing no matter what you were using to cover payment processing.
In this case the fear of dealing with PayPal lead the author of the link to do what would have been the right thing no matter who they were dealing with.
Banks and credit card companies seem to get it right with many more regulations, why can't Paypal? If I use my credit card for a spending spree, all it takes is one phone call with Visa to have everything cleared up. Paypal wouldn't have earned their reputation if they were able to provide that level of service.
Let me put it another way: when my CC issuer detects an anomaly, they block the charge and contact me rightaway to resolve it. I don't fear anything because I know they'll do the right thing and keep me in the loop. Why can't PayPal have such a symbiotic relationship with their customers, rather than instilling fear?