I think the simple concept that we're missing here is that Paypal is a business, in business, and it does their bottom line no good whatsoever to process payments in which they're not making any profit on.
The way people used to send money as a "gift," was through the mail (which cost), bank draft (which cost), check (which cost), money order (which cost), or Western Union (which cost).
Paypal provided a convenient loophole, and by what a few people have posted here (and things I've seen written elsewhere) and even eBay sales links, people have been trying to widen the loophole to include things not covered under the parameters intended by Paypal. Seems we've done it to ourselves, so no sense whining about it now. Sad thing is that the only people that it hurt were the people that were using it correctly.
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