Isn't it the case that you can upload higher quality audio with YouTube if you want?Yup. Like Immersion said, you can encode your file with uncompressed audio so it only gets compressed once instead of twice when uploading to YouTube. That's what I do.
Regarding Bandcamp, if someone is going to rip the streams (there's a very easy way to do it via Firefox), they weren't going to buy it anyway. Just another form of piracy I guess. Agreed it's a shame they don't allow you to choose which tracks you want available to stream without paying $10/month.
Immersion, that sucks about the high rates you're getting for PayPal. In Canada, the rate is 2.9% + $0.30 (i.e. $3.20 fee on a $100 sale). I guess the rate is higher in different countries? Believe me, I've heard horror stories about PayPal, but I've been using them for years to buy stuff and receive money through my site. Never had an issue.
And what are they doing with all that money? Probably rolling around in it.