The biggest problem is the PayPal refund policy.
Nowadays anyone can buy a domain through eBay and/or PayPal, pay, receive the domain and after a while, request a refund for unauthorized credit card payment.
Since they don't offer seller protection for untangible and/or virtual goods, PayPal is the best way to buy a domain name, ask for a refund, get the refund and keep the domain name you've bought FOR FREE.
PayPal is a great payment method, fast, secure, whatever.
For tangible goods (it's perfect for eBay sales) and for transactions with people you can trust (like, i.e., established members of forums).