Paypal is not exactly Knife or Gun friendly. If I were a business I wouldn't take Paypal either. Why support a company that if they had their way would put you out of business. I don't blame them one bit.
If I recall, Paypal started with ebay as a way for individuals who otherwise couldn't process a credit card to accept a form of payment other then check or money order. Back then you really needed a business to process Credit crads so Paypal was born to allow people to buy and sell on ebay without having a business.
An on-line or brick and motor store that has the ability to process credit card payments really has no real reason to accept Paypal from what I can see. Especially if they are selling knives.
You get just as much, if not more buyer protection when you use a major credit card so in that regard I wouldn't be very concerned. Better to the check the reviews and feedback of businesses to see if they are trustworthy.