There's another thread on this topic, with a huge # of posts, and it was dismaying to see people so willing to blow off the law, as long as it was something THEY thought was okay. Copyright law applies whether you like the people who produced the content or not. A nuisance, I know, but there it is.
I'm not sure what this guy was doing. If he was sanitizing movies, charging a small premium and sending the full price minus the premium to the studios, I'm okay with it. If he wasn't sending funds back to the source, I do think it's problematic.
The idea of sanitizing need not be limited to the likability of the producer or actors. It has to do with some people simply not wanted to have children's or adult movies loaded with improper content. I'm not trying to say that the adult stuff is improper, but some folks just don't care to hear non-stop vulgarity and sex scenes.
It seems to me that the studios would do well to sanitize movies on their own, but they won't. It reduces their cash take considerably, but it's their choice.