About the legal fact, Bitcoin can not overcome paypal at this point. Paypal is controlled by financial organizations of the government . It's like an online midde bank for purchase and payment and it helps buyers and sellers to be safe with all transaction online. Bitcoin is not still accepted by government so that bitcoin transactions are considered as illegal transactions . I expect someday, Bitcoin will be accepted by government and I'm sure bitcoin can overcome paypal in the future.
I do wish the same. Paypal is now acting like a god of the internet payment facilities and so many times they favor their own interest more than they consider the interests of their user and members. One day, Bitcoin can be able to replace the services done by Paypal and I hope that day to come soon. As for now, they can co-exist and can even be complimenting each other if Paypal will decide to accept Bitcoin.