I guess it matters what "paying with Paypal" really means. I pay through Paypal for every online purchase whenever that’s an option, but the actual payment is made with a credit card. Anytime that I’ve ever had an issue, I have filed a dispute directly with the actual credit card, not Paypal, who is only a middle man.
Paypal does have their own credit card at this point. It's inconvenient to use if you aren't interested in them debiting your bank account directly for payment.

