I don't think that Paypal will be willing to take that risk. Thefts and hacks are very common in the Bitcoin sector. If some of the coins are stolen from the PP Bitcoin wallets, then according to the ToS, they will be forced to refund them. That will put them in a precarious position.
Umm.. PayPal will be providing their own service, which they would secure themselves. PayPal has never been hacked, and they get attacked WAY more than any Bitcoin service out there.