What the moral of the story then? Don't buy contraband on websites that accept paypal?
I don't think the police really care about going after the buyers, but if you do something illegal just be aware that they might come after you. You should not use paypal for anything legal or illegal anyway, they just love locking accounts and keeping the money.
Don't trust encryption wherein copies of your keys are on file with a corporate server?
That's obvious isn't it? Encryption is worthless unless you keep the private key safe. Don't trust people just because they claim to be trustworthy without doing due diligence. And the police can seize any data kept on any public webmail service or any cloud service if it's hosted in any lawful nation, which is basically any nation capable of running these things.
Or don't post packages of contraband from an address that can be linked to you?
Any address can be linked to you if the police throw enough manpower at it, and one of their amazing powers is very large amounts of manpower. If you seriously break the law and keep doing it they will have freaking armies hunting you down. I remember a stolen bank card case in the UK once, a guy was using stolen bank cards to withdraw money from a certain bank. He was withdrawing money the same day each week but never used the same bank machine twice. The police had people watching every single bank machine, freaking thousands of them. The guy didn't show that day so they did the same the next week and caught him.