Sounds good and everything. Honest people will use Bitcoin. Dishonest people will content to use credit cards and follow steps 1 through 10.
Unless paypal is planning to stop accepting credit card payments for digital goods (which I'd say is about as likely as a snowball's chance in hell), then they haven't really improved their position at all. What they have done, though is reduced the fees they'll pay to the credit card companies.
Honest buyers will use Bitcoin, not necessarily sellers. For instance, you can sell a fake digital product with Bitcoin (various ways I'm sure you know, outside of just not delivering the product), scam the buyer and the buyer is SOL.
This already used to happen with Liberty Reserve before they were shutdown.