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I noticed the same thing as you did and wanted it gone for security reasons. Took some searching, but this will fix it.
When you were directed to paypal last time paypal probably asked you if you wanted to do this "pre-approval" thing. If you say yes... it sets your paypal up to allow Steam (or any other website) to bill you without you entering your password.
You might not have even realised you agreed to that last time you were on Paypal.
You can "unset" it from Paypal (rather than fully removing Steam from remembering your paypal), by going to Paypal's website, going to your "Profile", then "My Money" and viewing your "My Preapproved Payment" section.
It is a /Paypal/ trying to push its "Pre-approved Payments" thing on people.
Thanks
SUGGEST A MERGE MODS IF YOU SEE THIS.
Also what security do you go through if you pay directly with a credit card?
On your end you can store the billing info and card number, it will only display the last 4 from then on and you will just have to enter the cvc on the back of the card
I know it has gone live but I can't find the page but one of those links might take you to it. It's a new program the just recently launched to make the new payment method less restrictive.