@Gavin, why would the seller in your scenario be anymore protected against paypal frauds than all others selling hard currency for paypal? Just the presence of a delivery address you think is enough?
Yes, the delivery address and the fact that you're selling a physical product (the USB stick).
Kind of like how you used to be able to buy cheap OEM copies of software but they had to ship a token piece of hardware in the box so they could say they were hardware vendors... (actually, can you still do that any more?)