True story that shows how I imagine PayPal would adopt bitcoin.
Yesterday I sold something and as an experiment I offered the seller a choice of $400 by PayPal (sent as a gift, so no fees and no charge backs) or $360 worth of bitcoin (based on a $600 USD exchange rate).
In other words, a 10% discount to pay in bitcoin. (It saves me the hassle of pulling the funds to my account and currency-converting to AUD and then paying the exchange fee to get them into bitcoin, so it was still a good deal for me).
The buyer is tech-savvy and lives in San Francisco - so I would have thought easy to get their hands on bitcoin.
They still paid with PayPal. Cause it's easy - they already HAVE a PayPal account.
Imagine if PayPal added bitcoin as an extra "currency" - their 2.5 percent "merchant fees" are not wildly different from the fees to convert USD to bitcoin (I currently pay 1-2% with coinjar in Australia).
They could do this reasonably easily, even use a third party to actually convert funds to bitcoin and make extra profit on their internal currency conversion rate spread.
For charge back protection, they could do a rolling hold so that a percentage of funds received in bitcoin are not available to the merchant for withdrawal or conversion for a minimum 60 days. Forced bitcoin savings - with luck, they'd be worth more by the time I could withdraw them!
Imagine if this happened.
PayPal would be like coinbase, only with consumer-protection "features" built in. As a merchant, would you pay a premium rate to access a larger market of consumers? Well, that's why merchants pay visa / Amex etc. extra percentage so we know the answer is yes.
The big deal for bitcoin would be opening it up to millions of consumers and hundreds of thousands of businesses that have currently not even heard of bitcoin, through a payment gateway that they are already familiar with, and that already works with their shopping cart.
Plus PayPal could offer subscription bitcoin payments by simply converting user currency to bitcoin automatically as needed.
Lots of potential here - could be MASSIVE!
My $0.02 satoshi worth