The problem with PayPal, and the reason why these horror stories exist at all, is simple: the entirety of PayPal's dispute-resolution system seems to consist of

The problem with PayPal, and the reason why these horror stories exist at all, is simple: the entirety of PayPal's dispute-resolution system seems to consist of "the system flagged it, tough luck". And the only way to get actual service from PayPal past that point is to raise a massive cry of bad PR for them online. So, yeah: if they don't want to deal with their customers, we can fix that by encouraging a situation in which they have no customers to deal with.