Every time someone sets up a paypal service related to bitcoin it gets shut down and people lose their money. To save future losses I propose paypal be given a scammer label. I dont exactly know how this be accomplished but perhaps replacing the word "paypal" with "scammer" is sufficient 
Paypal terms forbid using it for any virtual goods, it is to be used only for trading physical goods, shipped by post to a physical address, how difficult is that to comprehend?
There is one Paypal user who got an exception: VirWox
Everyone else who uses Paypal for anything else then a physically shipped product deserves to have problems - Paypal is not ever to be used for anything that is not a physically shipped product by mail - remember that forever, period. Even sellers who sell mobile phone SIM-lock unlock codes - which cost JUST SEVERAL DOLLARS EACH - and are a number that could be send by E-mail - send them by physical paper letter - although it increases cost and time of transaction - but there is no other way - even if its 5 dollars, break the rule and you'll lose money.
