I've had one or two problems with PayPal. One required a few months of back and forth for me to get some money back.
I still use it though. The thing is, PayPal has quickly become THE payment method in a lot of the online world. If a site does not have a credit card system in place, it probably takes paypal. Even if it DOES have a CC system, there is a good chance it has PayPal.
The problem with this new site is lack of info. If you bought something from me and told me that I had to sign up on some site i've never heard of to get my money, you'd be damn sure that deal wouldn't go through.
PayPal has become, like it or not, a standard in the online payment world. You either need to use it and accept its shortcomings and potential problems, or use other methods and prepare for potential lost deals and questions on why you DON'T take paypal.
That won't change until a big player comes along with enough brand recognition to create trust. My guess.... Google is teh only one short term that has a chance of stealing PayPal's thunder.