"How hard has this Reg reader really tried?"
Does PayPal include that physical address in emails sent out to users? AFAICR, no, they don't - so the person who owns the domain wouldn't have been able to determine that address.
(Note they deliberately carried out a password reset - which would be by attempting to log-in and clicking on the 'forgot password' link, or however it's done for PP, but that was just to confirm it as an email address genuinely associated with PP; they wouldn't have been able to actually reset the password due to the security questions, so wouldn't have been able to get in and see the postal address.)