Usually I'm against this kind of idea because I think efforts are better spent trying to promote your own site. Even if you're willing to disregard your ethics, the Snidely Whiplash method of winning usually backfires anyway.
But if what you say is true about him attacking you directly, then he's already set the bar. You could try googlebombing him to discredit his site, but you risk screwing up the keywords for your own site as well. You could do as some other suggested and click bomb his adsense, that will screw up his adsense account but won't necessarily sandbox his site.
You could do as also suggested adn try to build a few more sites and work to get them ranking on the first page as well. That should be a little easier than getting the first site there, because you can use that first site to help the others. Depending on how well your doing in the niche, you could possibly even go to some of your lesser competitors and offer to jv with you to get their sites to move up in the serp to outrank the asshole site. Any sales you lose to those sites could be offset by whatever you work out for the jv.
I don't know that I'd try any of those things other than creating my own additional sites. There's a lot of advantage in doing that even if you weren't doing it to deal with an asshole.
