I'm certainly awed when I started joining this hobby on how sellers want to do deal via PayPal but through F&F mode ... as opposed to Goods transaction ....
I do understand that there won't be PayPal fees for the seller who got paid via F&F .. but the buyer is losing the Buyers Protection.
Sellers should really just factor in the fees and hence Buyers will always be eligible for Buyers Protection.
I guess the risk is handled when a sale goes above a certain value ($50 for most) then as a Seller you insist on registered postage to protect both. Otherwise it's an honour system which is the environment we would all prefer to be in.
I do agree to a point as the down side is PayPal don't get paid for a service they are providing so eventually they could remove the option completely.