Excluding foreign buyers (wherever you live in the world) will, of course, affect the prices achieved. The same is true of Paypal (I'm sorry to admit) for those countries that permit Ebay sellers to not include it in their payment options.
There have been many auctions on
http://www.ebay.com (effectively the USA arm of the international site) that have excluded foreign bids in the past. The sellers have a right to refuse bids from anywhere so I don't blame them at all but they are definietly losing out, so it's their financial loss.
AS for Paypal being added into the equation, the best Ebay site in the world to look at for the painful truth about this is the French site at
http://www.ebay.fr
It is very common for high end Pathé machines to make "Continental money" when the seller refuses to accept Paypal or ship worldwide. The same items being offered with Paypal nearly always sell for a lot more. This is also true of items available "worldwide". However I have also noted that whilst some French sellers offer Paypal, they nearly always refuse worldwide shipping whilst those who do offer worldwide shipping, conversely don't accept Paypal. Why is this and is it purely a coincidence? I think not as it must be the case that the average French seller does not trust the foreign buyer or at least expects problems from them. Paypal offers so many guarantees to the buyer (sometimes at the sellers expense) that the argument seems to be, if you want Paypal guarantee on my item, you'll have to collect it from me yourself so I see who you are and get a signed receipt from you. Alternatively, if I post something internationally, by refusing you the Paypal option, I'm preventing you from having the normal buyer guarantees. Personally I think sellers who play this game, are somewhat short-sighted and they are feeling the pinch in their pockets as a result.