First off, if you're going to tell someone to "think for a second," at least take a minute to read the original poster's post. Paypal made the acccusation, not Steam, you say?
"PayPal put a hold on the $12.48 payment for some reason, and Steam locked my account under the classification of fraud.[/B]"
Do you get that? STEAM locked his account under the accusation of Fraud. Not Paypal, Steam. That you start out with an accusation that I'm not getting my facts straight while it's you that's making a blatant factual error doesn't help your case much.
I would like to introduce you to the concept of "Cause and Effect."
"PayPal put a hold on the $12.48 payment for some reason, and Steam locked my account under the classification of fraud."
PayPal's error, being an alleged arbitrary hold on funds, led to Steam handing a game to a customer- and then never getting paid for it. Steam not getting paid led to Steam withholding their services. I would also like to know what PayPal's justification for freezing an account "for some reason", if not an implied accusation of fraud. If you think that a pseudo-banking organization is justified in arbitrary withholding of your money, I don't understand how you can then say that a DRM organization is wrong for assuming that you owning a game without paying for it is theft.
The point remains: Don't use PayPal with Steam. If PayPal arbitrarily decides not to pay for purchases, and you know that Steam will react this way- and there is an alternative... use PayPal? No. Use your debit card. PayPal is notorious for this kind of action, and honestly, has a worse reputation that Steam ever will. Granted, if Steam thinks you are screwing them... they will eff you hard. However, PayPal has a history of just screwing you- regardless of what you did.
Make a purchase? Just kidding! Withholding funds.
Hold some money? Just kidding! Empty your bank account.
Transfer funds? Just kidding! Thanks for the cash.
However, the reason that Steam will close your account is that... it's not your account. It's Steams account- and they can close it whenever they want. As a DRM company, if they can't confirm that there is only 1 copy of the game out there... they will consider your copy forfeit. Most games EULA's as well as Steam's EULA are written this way. If you violate the terms of the contract, the company's obligation to you is nullified. Yes, it is a misunderstanding in this case- and Valve has atrocious customer service... but these are all very, very well known issues. The cause of this dilemma is PayPal just cancelling transactions because it's Friday. Or the moon is out. Or your socks are white.
I will admit (and have admitted), Steam needs to make these kinds of issues easier to resolve- but it's not their fault that PayPal is an unreliable, garbage system that is marginally better than handing your credit card information out on one of the various "chan" forums.