If you don't take Paypal then you are loosing sales. That's just a fact. Personally I think your worries about Paypal are groundless. Yes, these situations have happened to people, but they are the exception, not the norm. I've conducted thousands of sales through Paypal since their inception and I've never had any trouble. The extra fees DO bother me, and it pisses me off that they go to eBay. It bothered me much less when those fees went to a different company who was providing me with a service that was a benefit. Now it's just extra money to a greedy monopolistic bastard, but if you don't use it, you're loosing.
When I buy, I won't deal with someone who does not take Paypal. If I'm going to be inconveinanced, I'll take my business elsewhere.