Paypal would have been better off without this message.

I read the Regretsy story yesterday, didn't think much of it - typical Paypal customer service, I've read those stories 1000 times. Now that I know it got someone's attention at Paypal that is "important" and could have done "right" in one way or another but they blew it.

At very least they could have refunded them their transactions fees! Paypal now looks worse in my mind than if they would have said nothing.