You could keep your money in PayPal, in which case you couldn't do a whole lot with it
Sure I could, I could transfer it to another Paypal user at a minor cost, donate to some site I liked, I didn't even have to worry about having to convert my money against some exchange rate.
you could remove your money from PayPal, but that required a service charge.
Bank transfer was free for me?
deally, I'd be able to securely send money to a retailer, without giving them my credit card number or any other private information, and they could just send me the goods. This is what BitCoin is trying to solve.
Depending on how the payments for certain websites are setup with Paypal, that's possible too - No personal information, in reality, I have seen most merchant configurations setup to provide name and e-mail address. Credit cards / bank details etc. are never revealed to the seller.
Giving the ability for the buying party to send money directly to the seller, without having to pay a huge transaction fee to some third party who authorizes the transaction.
I guess you've never actually tried to do it in Bitcoin... Buy Bitcoin, pay payment processor fee, exchange fee, transfer fee (if you want to send it in a reasonable amount of time), other party gets it, exchanges at a cost, then gets that money out through bank or paypal etc.