Paypal isn't a bank, and as such are not subjected to same regulations as a bank. If I am not mistaken, technically any money in your Paypal account is their money, not yours, and they can basically do what they want with it. That is why we see many cases where big accounts are locked, funds are frozen (or in Paypal's care), and no explanation is given to the owner. If they were considered a bank, they would be quite different, and held accountable for your money (and they would have to guarantee it).
If Paypal keeled over today, the company that takes over might seem better, until they have a controlling market share and can do what they want with their users.