First of all....2% of over 100 million users and only on accounts with large jumps in activity means that freezing over 2 million accounts allows a company to earn points on money of yours that they are holding...even if it is just for a couple days...think about the tally in the end.
Is it avoidable?....completely....for a company as large as them...with the money they generate they can afford a million dollars or 2 a year to staff an office of people to call people from a number on file to confirm that they are doing something legit before taking actions on a flagged account...If that is a hassle for a large company, they should think about the fact that for a small company relying on them to move money around in digital form, being locked out from their funds could cause them irreparable damages. Not everything should be automated....period.
If they are going to have the fees they have, they should at least put some of them towards keeping their giant mass of a company from gravitating smaller companies whose financial transactions are based in large around paypal into a dangerous space.
If they freeze your account they should be able to speak to you in person in under 12 hours. We are talking financial here...as a consumer you do paypal a favor by keeping money in their accounts...they gain interest on your money while you gain none. Under that premise...I will assume that they have plenty of money available to setup a program to prevent measures like this....
For the most part I am happy with paypal...would I try other services if I thought I could trust them?, sure...but the only negative experiences I have had myself with PP was paying for things/not receiving/escalation fail/wait 6 months for money and because it was small amounts...I just stopped using them for 1 year for each transaction in which this occurred.
We are even for now...but don't think if someone can create a solid payment gate that is world wide and also have real call centers where you are talking to someone from your own country where answers are given clearly and well thought out and not read from a cue card that I would not be doing my transactions with them...because I would. End of story.
Until then, I am limited as to what I can use and will have to deal with what is available and usable. (FWIW I have had more problems with a single unnamed bank than paypal...so for each his own experience and thus his own interpretation of the situation.)