It could work within one country, but I suspect they would use stolen US credit cards to get funds on Paypal, but then transfer that money to a bank account in another country where Paypal is unlikely to be able to get it back.

So the owner of the credit card should get their money back from their bank (or credit card company? Not sure how that works in the US) which might get their money back from Paypal if they want to bother, but it's probably too difficult for Paypal to get their money back from some bank in a country where they might not even have physical presence.