Because there were flaws in the Paypal service that allowed for fake accounts and hijacking of real accounts.
Neither your passport nor your driver's license is personal. You show both when asked for identification as needed.
And whichever you decide to use (I chose my passport because I don't drive) make sure the name on it, on your eBay account and on your bank account match.
If you are John Jacob Jingleheimer Smith on your passport, JohnJJ Smith on your bank account and JJJinglehiemer Smith on your eBay account, you will have trouble until they do match.
You are not required to provide your SIN, although that is also requested and can be given voluntarily.
And apparently the micro-deposits system doesn't work with Canadian banks because of currency exchange even at that micro level.
Sometimes the best prevention is making cheating harder. Having a double door on a shop doesn't prevent theft, but slows down the thieves enough to make them move on, because criminals are lazy.