Sigh. Yet another example of why Square is too bolted down and closed tight to be useful for much of anything. So infuriating.

Well, if you really want to sell e-gift cards, just open up the e-gift card link from your website or bookmark in the browser and sell it.  It is just not available through the POS.

Yes, I've done that but I would have to key in the credit card information instead of swiping the card, correct?

Yes that is correct and because it is a web based transaction you are paying the ecommerce rate.  Ultimately the physical give cards are cheaper.  You can also recharge and reuse them.