Remember that PayPal gives you the option to simply use your credit card company's exchange rate, and not the PayPal rate. I agree the PayPal rate is very high, and the majority of times you will be better off using the option in PayPal to just use your credit card's rate, not theirs.
I actually like that they give you that option, but still provide the Buyer Protection that comes with using PayPal. Believe me, there are LOTS of collectors who have benefited from PayPal buyer protection when items are not received or not as described!