While I agree with you about many of the points you raise, I do have an issue with this redesign. 2 extremely important areas of the current Paypal dashboard are the banner for the 'Free webinar with Buddy', and the 'Get a free card reader' advert in the bottom right. Your decision to omit these from your redesign will of course make it look nicer, as would removing ad's from many websites.
I think it would have been more worthwhile to keep these elements in a redesign, but see how they could be better implemented. This way, you would at least be considering the business motivations of Paypal, as well as user experience. As a designer, it is important that we analyse and react to all these issues. Otherwise, you risk putting your work in a 'closed environment', only considering the more convenient issues and not the real tough ones.
Jus' my two cents!
It's a classic problem. As designers, we can look at an existing system and identify issues that, if changed, would make the experience significantly better for the user.
I've had a couple of really nice long chats with some of the designers at PayPal here in London. It turns out that the single biggest obstacle to changing the site is the users themselves.
Because PayPal has been around for a very, very long time (in internet years), the user base is huge and a large number of those users have been using PayPal for many years (I can't remember the actual statistic quoted to me; I believe it was five?).
These users have were around when every other email seemed to be a phishing scam or a fake email from "the PayPal team" telling them their account was locked/stolen/broken. And as such, these users are particularly resistant to change. Any new UI, any new visual change is met with a flurry of customer service calls and emails to determine whether this is the REAL PayPal or if it's just another fraud.
I recall seeing a stunning login screen mockup for PayPal. Gorgeous colour, typography, hierarchy and the interaction for signing up, logging in, or paying without either of those first two was both intelligent and wonderfully animated . And it never went live. Because in testing, users rejected it outright because it was too far from what they'd known.
So while I applaud your efforts and think your work is really quite nice, it's worth taking a moment to keep the myriad of frustrated PayPal designers in your thoughts. They're doing their best, they've got hard work ahead of them and it's going to take a very, very long time.
IT'S A TRAP :O
Yes upping contrast would help a lot. It took me too long to find the search bar, some pure whites may even make it look crisper. I think a lot of pain for large sites like pay-pal is how slow they feel. Which no amount of design can change.
I agree with Joe that while it does make it look nicer to remove their ads/upsells, it isn't realistic to do so.
I think it is a great shot at a off the cuff redesign, but the one area I'd change is your contrast. Its the cool thing to do to have lighter and darker shades of the same color as the text & background but it can often be very strenuous for people with sight or color problems to read. I don't think that is just a problem with this design, but many designs today.
Speaking of Paypal, has anyone noticed that they've started to make changes to their site? I'm not sure if I've just been seeing different versions of their API/checkouts, but I think they're finally updating the designs?