To be fair, he can do whatever he likes - as long as it's legal. Aside from the murky spammy waters Mahalo seems to wading in, the "nofollow" is merely a hack devised by Google (that's also acknowledged by Bing and poorly implemented by Yahoo).

Jason can put anything legal on his pages with no qualms or being a "scammer" or whatever. It's Google's job, then, to remove Mahalo from the index if it doesn't like his "content." The ethical argument should be around this scraping, not the use of a proprietary hack Google came up with to get around an indexing problem they couldn't be arsed to solve properly.