According to PayPal they’ve deprecated this capability. Here is the message I received from their support team.
“Unfortunately, PayPal is no longer work with Digital goods integration.
That is why you receive this error message.
We might add again in the future, but there is no specific date for it.”
It looks like they are phasing it out over time for customers. See https://developer.paypal.com/docs/classic/express-checkout/digital-goods/IntroducingExpressCheckoutDG/
