I wish this was a possibility too! And it seems like having DC would make this more feasible, if Etsy's concern is that buyers would "buy" items, then fail to follow thru to PayPal for payment.
If someone who's not registered on Etsy puts something in their cart (can they even do that w/o being registered?) and proceeds to checkout, if they choose DC, then let 'em through ... and if they choose PP, then have them register? Just an idea ... but I don't really know what Etsy's reason is for insisting that shoppers have an account.