In 90% of "Paypal Suck" cases it's down to people not following the procedures.
The amount of times I've seen the usual "Paypal have ripped me off thread" and it isn't until about post 20 we learn that it was an EBay seller who once again decided to try and save a little money and not use a trackable package delivery system.
Paypal deal with hundreds of thousands of transactions a day and for there to be relatively few problems with these is pretty amazing.
As always people love being vocal when there is a problem - people aren't so when they are not having any problems and things are working for them.
If payment has been made to you from a compromised account then of course it isn't fiar that account should have to pay a refund.
There is only so much that Paypal can actually do to get money back.
If there is no paper trail to a person then it isn't as if they can send the bailifs anywhere.
I shall have to say that in the years and years I've been using Paypal (both buying and selling) I have only been "stung" once and that was when not sending to a registered address.
I learnt my lesson and never did that again.