I agree. mandatory PayPal is just another way of them squeezing some more revenue ( I just sold a guitar for $590 and got charged $46 - I think you've made enough eBay!).

Having PayPal as a payment option is great, however, if you don't want to get slugged with the extra fees you should have the option not to offer it. As you said, i f the buyers don't like it, they can always shop elsewhere.