It's been years since I was involved in the hat economy (TF2, way back when keys were 2.33 ref, to be specific), but the two hypotheses aren't exclusive. Valve gamers are willing to spend money on hats, but someone using the economy to launder money is willing to take a percentage loss, so it was cheaper to buy keys (the default currency) with Paypal from people who had bought them Valve using stolen CCs than from Valve directly. If I remember correctly, the official price was $2.50 per key, but they could be bought on forums or subreddits for around $2/each.
Again, it's been a while and not a topic I actively tried to remember, so please don't take this as necessarily authoritative.
