Anybody who doesn't have a credit card can't buy from Amazon (easily) right now, even if you have a paypal account. Given that EBay and Amazon are direct competitors in the retail space, it made good sense not to share purchasing/sales information with Paypal.

Once Paypal and EBay are separate entities, Amazon now can reasonably enter into a merchant agreement with Paypal.

I don't buy into the Amazon/Paypal being competitors - while in theory this is true, Amazon has far more to gain by accepting paypal customers, than it has to lose by not winning the online payment business.