Ebay absolutely lacks the seller protection to ever make this kind of transaction. If I purposely tried to design a market that supported this kind of fraud, (even encouraged it, in a nurturing "please do this" sort of way). I couldn't do better.
I'd guess that's PayPal that lacks protection, since they are the ones making the decision. Probably because their arbitrators are ignorant in what Bitcoin is and how it works. I don't even blame them - they can't know everything, but one must know there's a risk PayPal would rule against you if you sell something that you can't prove is delivered to their satisfaction.
This is part of the form letter that PayPal sends when you are caught selling BTC after the fact:
"We have reviewed your PayPal account and found that you are operating as an e-currency dealer/exchanger including the sale of electronic media of exchange (such as electronic money or digital currency). Per our current Acceptable Use Policy for Money Service Businesses, PayPal may not be used to operate a currency exchange, bureau de change or check cashing business including the sale of Bit coin."
So PayPal knows what BTC is, they just straight up ban digital currency sales.
OK, then it looks like whoever sells BTC on eBay and uses paypal is pretty much setting himself up for trouble. So the OP has nobody to blame but himself...
Haha, you're assuming that if they knew what bitcoin was and believed that the seller and the sale was legit, that they would have sided with the seller.
The only feedback the seller mentioned was in the buyers leaving it for him.
If the seller required a good account history, and stuck to the US, he may have not had these problems. Arguably those buyers could have screwed him on anything (remember the story about the rare violin destroyed at Paypal's request.)
There are things worth a lot more than $90 bought and sold on eBay every day. I would argue that buyer to seller reputation and thus integrity is more important than the reputation of the marketplace or medium of exchange.
eBay at one time was dealing with a lot of seller fraud with sellers that didn't ship, shipped you a rock instead of a laptop, etc. over the years they started adding more and more buyer protection to keep shoppers from being scared away. Unfortunately they tipped the scales so greatly that now, as a seller, you can very easily be scammed. The scammers have simply moved to the other side now and commit their scams as buyers.
It must work out better for eBay that way. But it sucks to sell anything of high value.
Yeah, this is the problem with fighting fraud at a venue like eBay. You invariably tip the balance to one side or the other, and the fraudsters just move to that side. The tough part about tipping to the buyers' side is that buyers always have the power of the chargeback anyway.
But, eBay probably made the decision by simply asking who it is better to frustrate: sellers who have very little choice of viable venues at which to sell, or buyers who have a plethora of choices from which to buy.
