Herbies is a legit sponsor. With ordering seeds, comes the risk of being seized in customs.
When you order, you are given the option to pay for standard airmail with no tracking (and they state that they cannot resend/refund orders if they do not arrive, or arrive damaged), Or you can choose the option of Insured airmail with tracking (If your order arrives damaged, or does not arrive, they are able to track it and see that it did not arrive, and will resend your order free of charge).
With that being said, I have ordered 3 times from Herbies, and every order has arrived safely. I wouldn't cross them off your list yet. I know of several others who have received their orders without a problem. And I know of people who ordered and didn't receive their order, they contacted Herbies, and their Insured order was promptly reshipped.
As for paypal, it's a personal preference. Paypal does take a chunk for themselves when you send money, and that amount is deducted from what the seller receives. That could be a reason.