Maybe their response in this specific case is warranted, but there are thousands of other smaller cases where PayPal simply does what it wants even if it's completely unfair and illogical.
PayPal is a shitty company, with a borderline monopoly on online payments until very recently.
PayPal is made shitty by the laws relating to the financial system. If it doesn't act shitty, it stands to get fined for hundreds of millions, or even billions of dollars.
PayPal is a shitty company, with a borderline monopoly on online payments until very recently.