His practice is a clear case of click fraud and his above-normal click-through rates demonstrate that he was successful in that fraudulent behavior.
Google correctly identified his business as dishonest and terminated his account per agreement that the guy signed when he started using AdSense.
You try to make a case for Google trying to determine shades of gray, but it's a non-scalable, slippery slope.
The current rule is crystal clear and simple: don't encourage users to click on ads they otherwise wouldn't. By definition every such click is fraudulent because the user wouldn't otherwise perform it.
Google (or anyone else, for that matter) cannot implement more subtle rules (that weight factors like how many times someone did it, how often does he do it, how subtle the encouragement is, how many kids he has to support) in a scalable way.
Google couldn't even apply more subtle rules in a consistent way, giving fraudsters even more weapon in what is a PR game (take all the ample, emotional justification from the above post AND allow that fraudster to point to other people who are doing similar things but Google hasn't taken action against them because some fallible person applied a different subtle standard for what fraud is than some other fallible person).
As this thread demonstrates, there's plenty of people willing to sympathise with the fraudster despite clear, self-admitted evidence of wrongdoing based purely on his self-professed (hence extremely biased) version of how good of a person he is and how good intentions were and how badly he was treated by big, cold Google. Emotion can trump facts.