Using PayPal is a game, at one time or another there going to limit you and theres nothing you can do other than play by their rules and do as they say.
Im not positive why exactly but I think it ties into some of the reasons they may freeze your account: 1. If you are new and generating alot of sales, they will freeze your account because lots of sales in a given amount of time to them = spam. So they do that to make sure you arent spamming people and cheating them out of their money. 2. If alot of people are requesting refunds they will also freeze your account for the same reason mentioned above.
I had to verify my Paypal account once, for some unknown reason. I had to send them a fax with a bill (proving my address, name, zip, city and further details), and I had to copy my passport that I had to send them as well. I think their system needs to be improved - I for a certain had no reasons to get my account limited - I certainly hope they stop limiting users for no reasons. Regards, Meti