The entire reason Paypal exists as a Third-Party payment processor is to ensure fairness on both sides. They failed.
Importantly though in this case the buyer knew the price was to good to be true and his greed got the best of him. Plus the thing to keep in mind is the level to which a company like paypal can protect against fraud. Might be similar to expecting that a dry cleaner should detect a forged clothing ticket perhaps. Or a restaurant should detect that another diner is using your reservation. Doesn't scale very well.
I think your good judgement was clouded by what you though was an opportunity to make a large sum of money. As such you let your guard down. And ignored common sense.
For example, let's say you are on assignment for the US Government and you have a bunch of secrets in your briefcase. (Or you work for Google, whatever). You go to a bar and a super attractive hot woman (or man) strikes up a conversation with you. You are nowhere near attractive or rich or smart enough to have this women she is a 12 and you can only score 5's and that's if the woman is drunk. (let's hypothesize). So your brain should be saying "danger Will Robinson" [1] but instead it thinks "wow she likes me I'm surprised but hey anything can happen!!!". And the next thing you know she has walked off with your suitcase of secrets. What do they call that? A Honey Pot? Whatever. My point is perhaps greed is the wrong word so what is the word to describe what I am talking about here? After all you knew this was to good to be true and almost certainly not true however you did it anyway.
By the way I don't buy into that whole "to good to be true probably is" line it all depends on the circumstances. However what you did here was clearly someone outsmarted you, they knew paypal better than you did.
The lesson to take away is more "Use an escrow service and do due diligence" rather than "haha you got scammed"
Side note - author got his money back. Everyone wins!