1) Did you warn people who trusted you that you weren't able to repay that "I owe you" with real bitcoins?
Your very first question is where you're going wrong.
"Repay" what? What did they pay him that needs to be repaid?
The whole point of what he did is to show that ripple BTC ious are worth nothing - and so he can give them away for free. If someone wants him to "repay" the NOTHING they paid for the IOUs in the first place then I'm sure he will.
If you mean he wasn't able to redeem the IOUs then the you're also wrong - for at least two reasons:
1. He COULD pay off all the IOUs with 1 real BTC if he wanted to - he HAS enough funds. So your wording is wrong anyway.
2 What was the agreed means of repayment and the time at which it was to be made? There isn't any - so debating whether he can (or will) do something that isn't defined or agreed is meaningless.
You're confusing a worthless IOU with a contractual obligation to repay a debt. Ripple allows issuing both of those types of paper - and treats them the same (and allows them to be swapped for one another) - which is the issue being highlighted.
I'm tempted to offer to pay off his debt to close this matter - obviously I'd pay it off with ripple IOUs
