I'm afraid I.m not completely sure what is "illegal" or "encouraging" and therefore is in violation of Paypal's ToS, giving them the contractual right to do this. (Private enterprise not only has rights, it also signs away the right to do capricious acts in things called contracts).
First, to the best of my knowledge Wikileaks nor its principals have been indicted. (That alone would not make it illegal, but presumably would give Paypal enough contractual justification to terminate their contract since there would be a reasonable case that the action appears to be illegal).
Second, to the best of my knowledge, "leaking" classified material is not in fact illegal, unless you have agreed to make it so. When you go to work for the U.S. government you sign a contract / oath which states that you will in fact be bound by the classification system of the Executive branch, under penalty of law. Same thing when you are granted access to classified materials as a private contractor. Similarly, I believe that members of Congress on select committees (e.g. Intelligence) sign a similar oath to have access to materials that the Executive branch deem sensitive. If you are a plain old citizen, you can probably be tried for Treason, sedition, etc. by making certain materials public, depending on the content, the state of the country, etc. but coming across something that the government wants to keep confidential and making it public is not an illegal act in and of itself. Daniel Ellsberg was tried; the New York Times and its reporters, not.
Of course, I agree it is highly likely that the original leakers were bound. However, if you view Wikileaks as the Press, is it encouraging illegal activity? How about your local newspaper reporting a robbery?
Anyway, the material is not illegal. How it got to Wikileaks may be. The publishing, arguably not at all.
It doesn't sound like you were coming down against Wikileaks so much, but before anyone completely follows that thought and all its permutations, some food for thought.
