What you stated is correct - but the comment 
about if it's done on an individual level 
there's nothing they can do isn't true. I mean I 
doubt the federal govt will harass you but 
paypal WILL close your account if they find out 
you're doing it. 

Besides, the way I look at is this: if I go into 
a grocery store, or buy gas - would I pay extra 
for the convenience of using my credit card? 
Hell no. And I sure as hell wouldn't pay extra 
to use Paypal to pay for a cel. 

It's in both the sellers AND the buyers best 
interest when Paypal is used, they get the money 
instantly - the 2.9% or whatever Paypal is 
charging is worth it to me for having that money 
immediately. I'll gladly eat that for getting 
the money that quickly and not have to wait for 
a money order to arrive, and then have to cash 
it. :P