While I'm not a big fan of the licensing model, this IS the only way on this market really. With a different approach MorphOS would have been pirated in minutes.
Anyway, it really isn't as bad as you make it sound. First of all, we do give people new keys if they old hardware breaks, and when you sell the hw, you can simply include the key in the price. As for PayPal, you can still use a bank transfer, you'd just have to contact us first.