The skepticism about PayPal is well founded. PayPal has rightfully earned a reputation of imposing arbitrary decisions on account holders. Maybe if PayPal was more transparent and actually provided some semblance of customer service their decisions would appear more fair.

While its nice that the CEO has personally responded this actually shows a far greater dysfunction. Why should it take escalating all the way up to the CEO level to get someone at PayPal to listen and advocate for the customers position?

The contrast with startups is misleading. PayPal has been in business for a long time and is a billion dollar company. They have the resources to stop making stupid mistakes, but still persist in their bad behavior. They can get away with this because they've cornered a large part of the online payments marketplace.

Sure, a startup is going to make mistakes. And they're expected to. That's all a startup is really - a machine that generates mistakes in an attempt to find (or build) a profitable market.