The frozen funds all get pooled, and PayPal earns interest off the cash while the funds remain frozen. So they have a certain motivation to freeze accounts, then require their users to justify their existence with all sorts of paperwork they never mentioned upon sign-up. For instance, a utility bill that must be in your name. Not all of us have that.
Here's a thought. What about a site which accepted credit card payments from users who sought to purchase BitCoins, and then bought BitCoins when other users sold them to the site? It could then transfer its BitCoins to users who'd already paid, on a first-come, first-served basis.
You'd be enabling people to acquire BitCoins with cash. You'd be earning interest off the cash in the meantime. The availability of BitCoins would help the system thrive. The steady demand for BitCoins would make them even more valuable, and cause an increase in their valuation. BitCoins at once become more accessible to people, and yet also worth more.
You'd have legitimate interest earned off the funds, much as PayPal does but in this case legitimately, to fund the server costs and credit card processing. The site would be providing quite a service to the BitCoin community, and potentially gleaning interest above costs, without having to charge users for the convenience.