Currently, the number of banks who have been "hacked" is way in excess of PayPal, who as far as I'm aware have never suffered a major (successful) attack. There have been cases where individuals accounts have been compromised, but then again the same thing has happened often enough with bank accounts as well.
One simple technique to add an extra layer of protection when using PayPal is to link it to a credit card as opposed to a debit card or bank account. In addition, never use "free" wifi hotspots to either make a PayPal purchase or connect directly to PayPal and never click on a link within an email that says its from PayPal.
It is correct that most credit card issuers argue that section 75 doesn't apply when using PayPal, but PayPal does have its own payment protection scheme - although as MSE rightly state, it isn't as good for most consumers. However, given that a high proportion of PayPal purchases (I suspect) aren't over £100, section 75 wouldn't protect you anyway.
JF
