One of the fundamental parts of paypal is the ease in which a transaction can be reversed if the customer is not pleased. Bitcoin transactions are irreversable. Many websites that currently accept paypal may be cautious about this. So that means Paypal will have to take the heat if something goes wrong in a transaction. Something I don't see happening.
Yeah that is very true. The irreversible nature of bitcoin would change how Paypal currently operates with the ability to dispute transactions. Could definitely be a concern for websites such as ebay where you are purchasing products from someone want a guarantee that you get what you paid for.
I think you hit the nail right on the head... Consumer protection would be a concern with the use of Bitcoin in PayPal. If they can implement a system, where they can control disputed transactions, they would have already used it.
Or they could simply build in a disclaimer in their ToS for Bitcoin transactions for all disputed transactions. {Give the consumer the option, but wash your hands when the shit hits the fan}
