My cofounder lost about a thousand dollars worth of games when he bought Left 4 Dead 2 via PayPal.

PayPal, as it sometimes does, reversed the transaction due to its fraud detection systems, through no fault or instruction of my cofounder.

So Steam locked the entire account, permanently and irreversibly. It wasn't even an option to pay the $50 by another method.

I still buy Steam games, but only on sale.

This sounds extreme. What was the response from steam technical support?

That was the response from Steam technical support.

They were basically assuming fraud; which is what buying a game, receiving the goods, then issuing a chargeback (or PayPal equivalent) would be.

He patiently explained to them that it wasn't initiated by him, but they pretty much stonewalled him.

Apparently having done a thousand dollars worth of business already without incident wasn't enough to get the benefit of the doubt.

Someone else could do this right now. That could be a reasonable startup idea. I’m not experienced enough to know but this seems like it could be in the ballpark of sounding like a bad idea but not being (akin to what PG describes in his black swan essay).

UltraViolet is supposed to be that, although it's taking a while to get going.