If I mass produce Halo armor and sell it commercially at retailers, I'm not saying I own it, I'm just making the armor and selling it. Guess what? It's not only wrong, but it's illegal. So no, he shouldn't lay off. I know people who would do far more aggressive things in response to this, he should consider himself a very lucky person knowing the people that the internet tends to house.
And again, extremely high chance that he doesn't even have experience with the DS development software, even if he acquired it (which would have to have been illegally acquired, Nintendo doesn't hand out their software to freelance developers of any kind).