i like using both...bitcoin is better
I agree bitcoin is better than paypal. And I have some feeling that paypal is going to adopt bitcoin. SO that clearly says that bitcoin is better than paypal. Because if paypal is better than bitcoin, then the developers of bitcoin are the ones who are going to ask paypal to adopt their service. But it tends that paypal is begging for bitcoins adoption.
Personally Im doubtful of that precisely for the reasons you state, if PayPal did that it will be like accepting defeat they will be saying to the world bitcoin beat us and now in order to survive we need to accept it and become part of our fierce adversary.
Bitcoin is created for decentralization of funds, anonymity features, fast transactions and all those good stuffs but never to take down Paypal. There's no competition going on. The bitcoin network is not managed by a single company. It never intended to fight against other payment methods that exists. If Paypal starts accepting bitcoin, then it's okay. Bitcoin's not going to mock Paypal for doing that.
It is true bitcoin was not created for such lowly objective, taking down PayPal, but even if that was not the objective, if bitcoin keeps growing it may end up doing exactly that.