I don't think that paypal is a SCAM , But I've heard some rumors about scam issue but so far I've its working smoothly 
It's working smoothly only in first world countries. In many countries, it is hell to just have your money back to you after getting it from a different country. I am not saying that it is ridiculous mainly coz what can be used for good, can also be used for something really bad. But the rules for making an account limited should be less negative.
It basically means that no matter how many alternatives there are, PayPal does something right/better than its competitors. That's the difference.
I think the fact that people enjoy buyers protection is the main point of people to keep using PayPal while they get annoyed by all the rules set up by PayPal.