This is not the first time Paypal did that [1] and it most certainly won't be the last time. That's one of the reasons Bitcoin was invented. I hope that events like this will drive its adoption as a safe alternative for crowd funding and online shopping.
Bitcoin ftw. Sure, not everybody can contribute in bitcoin. But on balance, bitcoin beats paypal by a factor of infinity. Why infinity? Well, with bitcoin you could at least have some contributions, i.e. > 0. With paypal you get 0 contributions. (N>1)/0 = infinity.
Why would anyone WANT to contribute in Bitcoin? From a contributor point of view, Bitcoin leaves them massively vulnerable to fraud--it is almost as bad as mailing an envelope full of cash.
They are crowdfunding a speculative application. That's already mailing envelopes of cash. Although the users read that they are funding development and not buying software, Paypal grabbed it all and said they're worried about fraud.
Bitcoin lets the user assert that they trust the recipient. Or they could trust a third party escrow recipient. There's no payment processor to restrict who a crowdfunder wishes to trust.
Please don't be so vain. Division by zero is undefined, that is (supposed) to be taught in high school. The fact is that computers have to display some value when x/0, and that value is defined by IEEE standard in the context programing languages for consistency.
[1] http://www.gamesindustry.biz/articles/2013-04-23-skullgirls-... and probably there's more of this