Honestly, it is almost certainly the opposite. The vast majority of people use PayPal on a regular basis to pay for things they buy online without handing over a CC number. Those people generally have a perfectly fine experience and they never post about it. When people do post about their experience with a company, they are far more likely to post negative experiences than positive.
Putting that aside, I think PayPal should absolutely get reamed for this behavior. Even if they're only fucking over one out of 100k customers, it is still completely unacceptable and I hope they suffer for it.
I don't believe PP taking money is the outlier here. I know far too many people in real life who have had funds seized and never returned. I imagine it's happened to more people I know but who haven't spoken to me about it. I have had PP close one of my early accounts and keep the money.
As much as I hate Visa/MC/Amex et al they have never just stolen my money, or even left me holding the bag if someone got ahold of a number (as opposed to banks which have always left me hanging a la PP).
Putting that aside, I think PayPal should absolutely get reamed for this behavior. Even if they're only fucking over one out of 100k customers, it is still completely unacceptable and I hope they suffer for it.