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Because they tried us and decided it was in their best interest to no longer process for adult sites. They did not even super jack their fee's - as they have no reason to (yes we get raped by 3rd party billers willingly). We as an industry were even basically profitable for them and at the time had a lower CB percentage than auctions.
Problem arose that many people were making (at the time) non nude underage tease sites and using them. These sites, even though technically legal (at least at the time) suddenly got mainstream press coverage running from "primetime" style to "oprah" style news coverage. This associated the Paypal logo and company with these sites and they are not of the any news is good news camp. They dropped us - end of story.
Of course there was other sites that were very clean that got ass fucked. Then of course there was a crap load that felt they had the need and right to push the boundary of what others may find tasteful.
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