Part of the problem was that sellers weren't leaving feedback until the buyer left feedback. If the seller screwed the buyer and the buyer left negative feedback, the seller could leave negative feedback even though the buyer did everything in good faith. The old system left the buyer getting screwed twice by the same seller. Hardly fair.
As far as I'm concerned, the seller shouldn't see a dime from PayPal until he leaves feedback. If the buyer bids and pays, his end of the transaction is finished.
But this solution doesn't work either, as now the buyers have full control of the system and now they are causing the problems in spite of it. I had a policy of always leaving a positive feedback after payment was received, just the way i operated, if the guy on the other end tried to screw me and leave a negative well then not much more i can do about it. And i hardly ever get feedback from my buyers even when i do leave them a positive right away, they just dont follow through anymore!
Now the seller is getting screwed twice, once because they can file against us claiming they didnt receive the item and twice when they leave us negative feedback when i provide my shipping proof and end the dispute. Its happened.
The problem with holding back the funds from PayPal is twofold. I'm not shipping something until i have money in hand, which includes you paying me for shipping so i can pay the shipper. I'm not going to trust paypal to decide if and when i get my money.
They have instituted one thing that is like you mentioned, but the circumstances have to be in place. For one you have to be listing in what they consider a high risk category, electronics and computers is two of those, if your customer satisfaction is less than whatever percentage ( i forget what it is ) paypal can hold part of the funds, but they will release the shipping amount to the seller so they can cover their shipping costs.
Anyway, from your post i would guess you have never sold on ebay? No offense, but its just a whole different world once you become a seller on there. And now with the buyers holding us hostage, and all the non-paying bidders, its become worse.
From now on i will list things with a requirement that the bidder have a paypal account, a buy it now price only not an auction, and require immediate payment via paypal at time of purchase. This does a few things, one it keeps the non paying bidders out because they have to have a paypal account before they can bid on my auctions in the first place and most fake accounts don't have that. It means that the auction won't end unless they complete the transaction and pay. And i get my money right away so i can ship and move on!
Enough eBay ranting.. Sorry, had to get it off my mind.