it was always a gray area, they didn't officially back it but they didn't really take a stance against it either. They just assured you that you were not garenteed a refund for digital items and auctions on ebay with digital items were not really recommended buys. none the less i didn't really see any major stance baring it or taking them down, cause they get their cut either way whether you get ripped off or not.

The reason PayPal didn't condone those sorts of purchases is that there was no way for the buyer (or PayPal) to determine if the sale was of a legitimate item. Maybe it's an expired code? Maybe it's a fake? Only the seller knows for sure and PayPal wouldn't want to be held liable for questionable goods.

Operating directly with Blizzard is a different matter altogether, as there's no question that the goods being sold by one player to another are legitimate. The sale itself is still taking place in-game on Blizzards platform. There's no way for anybody to get ripped off, so there's no reason that PayPal wouldn't want a part of the action.

Well, the way I understand it is that you get the item as soon as it's paid for. The difference between using a game card and the RMAH is that Blizzard has direct control over the item being delivered. THEY are the ones doing the transfer, you aren't waiting on the other person to send it after payment is received. For lack of a better analogy, Blizzard is the impartial party, you hand him the goods to sell on consignment, he does so, takes the money and gives it to you (less their cut) after giving the buyer the item.