Paypal and other online payment services are reliant on existing financial institutions to work. Your account is generally tied to a credit card or a checking/savings account—meaning that whenever you spend money, you're subject to the same restrictions and limitations you would have for using those. So, let's say you had tied your PayPal account to Visa with a $2,000 credit limit. Before making an online purchase in excess of that amount, you'd have to arrange for a credit extension or make changes to the source PayPal was drawing from. Using bitcoins, users can spend as much as they want—as long as they have a sufficient number of coins to cover the charge.
At the same time, because there's no way for a bitcoin account to be frozen, users can transfer funds wherever they like. For example, last year PayPal (as well as Visa and MasterCard blocked users from donating funds to WikiLeaks. Bitcoin donations, however, went through without a hiccup.