The issue here is not what he was doing per se, but the intent. If you own the equipment, why should you not be able to do with it what you want? Or, for that matter, pay someone else to do it for you. There's no logical difference there. If copyright protection features were used solely for that purpose, then breaking them could be taken as evidence of violating copyright, as what's the point otherwise? However, on most consoles this isn't the case. You have to remove copyright protection features to enable homebrew code etc. and therefore the feature is actually an unreasonable restriction on your ability to use your own, perfectly legally purchased hardware. What they're doing is implementing the assumption into law that violating a copyright protection feature is evidence of copyright infringement, which is blatantly not true. By the same logic, buying a CD or DVD burner for your PC could be treated the same, as it allows copyright infringement, but certainly doesn't require it.
A good example are the cards for Nintendo DS consoles. Sure, they can be used to play pirated games, but they can also be used to play videos, music or homebrew games. So, saying possession of one is proof of copyright violation is simply not true. But, this is exactly what this law and the judgements based on it are saying. Effectively, it's removing the most basic tenent of any sensible judicial system and that is removing the requirement for proof of violation. This is one, not very large step, away from thought crime. After all, why would you think of a crime unless you intended to commit it. Therefore, by the same logic, surely thinking of a crime is good reason to bang you up? As you can't prove what you have and have not thought of (proving a negative is impossible), you are automatically guilty on accusation.
All this is the last death throws of various industries trying to maintain an outdated business model that they have been profiting from for years and are too lazy to change. The music/film/games industry are never going to get round people copying their goods. As soon as optical drives and PCs were widely available, this was always going to fail. Rather than change their business models to something that works in this new dawn, they simply get their puppets to implement more and more harsh laws to enable them to keep raking in the profits without doing anything. Used to be they had to find pirated games on you or at least prove use. Now, they simply have to prove you thought about it.
It will all fall apart in the end (unless they lock everyone up); it's just that in the meantime some quite decent people will suffer at their hands. Their model cannot work long term. Copyright in the old form is dead. Live with it and move on. Give music away to pursuade people to come to your concerts. Make money from the hardware and not the software. Actually encourage people to write their own code etc. for your platform to make it more desirable!! There are plenty of ways of making money in this new world, but these companies can't handle the change.
Even if he was running a business for profit in modifying these consoles, he has committed no moral crime unless he actually pirated the games. Otherwise, the companies that supplied him with the components he was using are just as guilty for supplying goods allowing someone to do it!! After all, if he is guilty for providing the facility for someone else to bypass copyright, surely his suppliers are guilty for providing him the goods to allow him to provide the facility?