His point is that the bond is too large, and that's _just_ for California. In the linked quora post, it was specifically pointed out that there are 43 other states where one has to do the exact_same_thing where the bonds vary from $10k-$1M.
You don't actually have to pay the $500k. A new business with no history (good or bad) might pay $25k to post a licensing bond.
I don't have anything to say about the 43 other states that want bonds to conduct money transfers in them, but some of the coverage here seems a tad breathless.
tptacek: Perhaps it is breathless, but I think many of us find it interesting. States noticeably absent from Paypal's licenses:
New Mexico,
South Carolina,
Georgia (heavy banking industry),
Rhode Island,
New York (heavy banking industry),
and Nevada (heavy gambling).
I might put together a spreadsheet this evening if I have time.
Edit: Check out PayPal's list: https://www.paypal-media.com/licenses