You're worried about pissing off PayPal? Or are you worried about what they might do to Steve?

Both.

Credit cards are VERY sensitive to issues like this and almost ALWAYS help you out and give your money back.

Yes, but the result of my complaining to my credit card company would be them raising a charge back against PayPal. No doubt such a move would not please PayPal and I would fear for the impact it would have on my and Steve's accounts.

Anyway, I am not trying to get my money back. I would just like it if no one else got caught into sinking money into Steve's PayPal blackhole.