Paajarvi was always seen as a guy that lacked finish. That's back to his pre-draft days. You're greatly exaggerating how much of a weapon he was, but beyond that, the point of brining up Lazar wasn't to suggest they were comparable, but rather that he, like Paajarvi, showed more offence earlier in his career than he does now, and that his decline in offensive production doesn't align with the offensive minded coaches he played for, but rather the ultra defensive minded ones they ended up playing under.
The oilers certainly hoped that he would develop into a more potent offensive threat when they drafted him, but other than the oilers being a bad team, I have no idea how you are arriving at the conclusion that the Oilers "scared him into never playin in the O zone". What did they do to discourage him from playing in the OZ? Was it the relatively balanced deployment he got (51% OZ)? Was it playing with offensively minded linemates like Gagner and Yakupov?