It's not really a matter of power but choice. In the end PayPal operates as a bank or money transfer agent and is regulated at the state level as such under the same rules for the most part.Banks have the power to do it same as credit cards
Not all banks* are pushovers either. Some <cough>Barclays<cough> are almost as onerous, but if you want to be punative, then do a chargeback through your credit card. PayPal will love you because someone else is on the hook for making the decision and PayPal gets to pop the merchant $20 for the chargeback.
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*credit cards are actually issued by banks so they are really one in the same.