PayPal has stopped accepting Steam payments made by the majority of world
(www.thegamer.com)
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They've restricted payments in all currencies...except anywhere using American, Canadian, or Australian dollars, the Brit and Euro money, and the yen? I don't know what they're playing at, but this doesn't look like part of the censorship sweep. It'd have to be an incredibly convoluted scheme if it was.
That's because it's not actually PayPal that pulled the plug, but the bank that PayPal uses for most currencies which has refused to process Steam payments. They use different banks for the currencies that are still supported.