Interestingly, Penn and Teller (although I've never heard Teller talk about it [har har] they seem to be in agreement) look at and talk about this sort of moral quandary a lot in the context of the tradition of magicians. For them, it's not enough to think think that "of course the audience knows" but to be honest from the get go.
Darren Brown did a stage show called "Miracle" (which was fantastic, but a different discussion) where he talks about his experience with faith healers and the like and says at the beginning that, which he doesn't like people getting suckered or lying, the experience is one that people should have, and goes on to spend the rest of the show "in character" as a faith healer.
The movie Leap of Faith also explores this moral dilemma.
I've never been upset at people doing whatever it takes to survive, but I don't think that it excuses you from the ethics of what you do. I definitely wouldn't consider what he did 100% ethical and it's OK to question what you do.
Do address something else:
> I think this guy needs to stop and revisit what he was doing. He wasn't a fraud. He was exactly what those people were paying for.
The cursed man didn't come in to see a magic trick or to be lied to, he came to have his curse lifted. There are many many people, whether ignorant or ill, who do not see this as some sort of entertainment or escapism, but actually how the world works. This is where the morally questionable part comes in. It's like casinos or the lottery: plenty of people go in expecting to "throw their money away" on entertainment, but nothing is done to tell people that it's not wise to expect anything to actually happen, and over-correlation can lead to addiction (and yes, addiction to psychics can and does happen)
It's far more grey than you think.