Interesting. The reality likely varies depending on the country in question. I've seen plenty of ebay sellers get scammed over the years, where PayPal then gave them a big fat middle finger. Some failed to satisfy the seller protection, while others went above and beyond and still got left out in the cold.

CC fraud is miles worse than PayPal dispute/claim scams for sure, and is an even better example of paying a premium to make oneself vulnerable as a seller. Existing blockchain startups that require KYC, all but eliminates that issue for merchants, as I'm sure you're already well aware. Seeing as this security enhancement is entirely cost-free, and there's no shareholders to appease, it's highly probable that both the merchants and consumers will see these benefits directly. Furthermore, some of these blockchain companies will offer high-yield savings accounts right at the consumer's fingertips. It's difficult for me to see how PayPal can compete. They won't be going away any time soon, but I certainly don't envy them.

So yes, even though PayPal is far superior to the CC processors you've mentioned, I'd still consider it as "paying for diminished security" when compared to a blockchain-based alternative. That's the reality, and I hope it becomes readily apparent to everyone, sooner rather than later.