According to PayPal, a significant amount of people are still using IE 3 and IE4. If that's true, then I suspect those people also don't have virus protection on their PC's, and those people are a security threat to all of us.
To me, PayPal is the Wal-Mart of the consumer e-commerce space, and its tight integration with ebay further makes them almost as important as the electric company. For the thousands of retailers that operate on eBay, PayPal is their only conduit for accepting payment, so to the extent that PayPal, and ISP's, can take the lead in securing their systems from phishing attacks, they should be applauded for doing so. PayPal is doing what any good IT department would be doing to remediate a threat, and that is notify you of the problem in advance, give you a small time period to upgrade, and then shove it down your throat if you don't. Today, there's no excuse for not upgrading your browser and keeping pace with security and virus updates. If you're not savvy enough to do these upgrades, then you shouldn't be using PayPal in the first place, and you certainly shouldn't be doing any online banking.