When I'm selling, the small percentage they take, means I don't have to wait days for payment and then drive to the bank (gas costs money! It takes time) to cash the check or MO and wait three more days for the payment to clear. I have it in my hand and I'm paid, right to my account!
When I'm paying, I want the item shipped as fast as possible, no lost check claims, no having to go get a MO or write a check and mail it (which means I pay for that postage stamp). Then wait for the mail to get to the seller. No way there should be any delays with Paypal. Plus I have a computer record of the payment, with Paypal!
Unless it's something that there's only one of a kind, or I have something very specific, that's never offered any other way, I won't bid. If I see an auction without Paypal and another that takes it, I'll never bid on the one without Paypal.
Since people are selling Silver Strikes, or Casino Chips, which are not "one of a kind" and most are offered over and over, week after week, I wouldn't bother with auctions that don't take Paypal. I also pay with direct transfer, no CC, so people get their money fast, without that extra baggage.
Simple facts of life, that most other people feel the same way.
Not taking Paypal will reduce the number of bidders, and lead to auctions selling for lower prices. I don't know why anyone would want to discourage bidding, drive away potential bidders, and cause their items to sell for less?
I guess if someone is worried about 30 or 90 cents, and doesn't care that they are selling everything for less, that's their business. But NOT taking Paypal will cost more in lost sales, lower bids and payment problems, than the small fee that is taken on the transaction.
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