It's certainly damaged their brand in my eyes, and it's not painting them as bullies: they're being bullies.
This is a person who's buying a product fairly, taking it to a place where that product doesn't exist, adding a minor markup, and selling it. There's absolutely nothing grey about this practice, it's 100% honest and legal. For Trader Joe's to sue him for doing something that's completely within his rights is beyond loathsome. He's a customer who's buying a huge amount of their products at retail price, they should be sending him thank you letters.
I think I might actually stop shopping at Trader Joes over this, as much as it pains me. It's just utterly repugnant behavior on their part.