What Tobias did with the Sapphire bootlegs is not something anyone could rationalize away, and therefore I don't think we can ever really trust him. However, I do suspect that we've vilified this guy to the point that some of our fears are a little overblown.
Tobias started giving away Xak III and Startling Odyssey II when Nightwolve contacted him after he put them up on his site. The give-aways may have resulted in bigger sales of other products, but I think it's possible that they are not part of a scheme which he will continue to apply to all translations. For example, where is YsIV? We've heard that he pressed them and is supposedly sitting on them. However, that was a while ago. Could it be that Tobias's morals are not so totally black and white, and that being asked by the translator not to release a repro made him decide not to? If only for the bad press it might generate?
Maybe, maybe not. Regardless, here's a few points I'd like to make.
-Dracula X is pretty special, and it's no surprise that he went out on a limb for it. Nearly every other translate-able game on the system, however, including Xanadu I and II, is completely different. The originals are cheap, and most people don't know the franchises. Therefore, there's much less reward for any risk even if he gives away pressed copies for free.
-We should talk to him. Seriously. Before a release, let's just message him and say "Hi. We're about to release a translation, and we'd really appreciate it if you didn't make reproductions of it. We aren't accepting money for these because we believe it's wrong to do so, and it discourages us from doing what we do when we see people selling reproductions of our work. If you really love the PCE and would like to see more translations, please respect our wishes. Thank you."
-Like it or not, Tobias does love the PC Engine. He's posted on shmups.com for years, and I bet he knows more about PCE shooters than a lot of you do. Again, what he's done with Sapphire and other works is inexcusable, but I think he just might be more complex than the mustache-twirling villain we have been making him out to be. He might respond positively to positive engagement.
-The thing that makes the RIAA and the MPAA look so ridiculous is how threatening and patronizing they are. I think it's possible to craft a loading screen message that tactfully appeals to the player's maturity...a thing that IMHO people around this somewhat insular community are incorrectly convinced that too many outsiders have none of. Furthermore, if adding a loading screen message moves even a small fraction of the people who would pick up an unapproved repro, I think it's worth it.
Just my two cents.