You bid on HIS auctions.
His auctions list Paypal as the only method of payment.
You never asked him if he would accept cash before the auction ended
You know you live outside the US and that might be a problem with other forms of payment
You asked him to accept cash which is against Ebay rules and he rejected your offer
And now you make HIM out to be the bad guy?

Not to be nitpicky, but if you bid on his auction you agreed to his rules and have a legally binding contract. You are obligated to complete the transaction and if that required opening up a Paypal account, so be it.

I find it strange that you somehow cast possible accusations towards a seller who did NOTHING wrong.

Am I missing something here?

Just my humble opinion.
Doug