One argument I've seen on PayPal is that it some people use the balance as an "off the books" place in family finances.

Stereotypical narrative: The wife will have a fit if she sees a credit-card transaction for an expensive hobby item. But if you just see "PayPal transfer, $300.00", or better yet, nothing because you paid out of a balance you filled up by selling junk on eBay, it has plausible deniability.

I'd rather pay with paypal than use a company hosted credit card processing system.

For paypay security isn't simply a cost center, their whole business is keeping these transactions secure. For a regular retailer, their business is selling some product, security is just an added cost.

By your statement, I have to assume that you don't really know anything about the history of paypal or the internal workings of the company.

Of all the online payment solutions, I think paypal is the most security-free solution I have come across so far. And the one that works the hardest to get your money into the system and to make sure that you can never, ever get your money back out.

getting money in and never getting it out has nothing to do with using it as a credit card processor.