Yeah, this is quite heartbreaking. I could see ordering a full kit from him sometime down the line. I think he had a few things holding him back. For one thing, he really undercharged people. If he wasn't bringing in enough cash per sale to cover that sale's costs in materials and postage, there's a problem. Also, I think he could have benefited from a lot better pictures on the website.
He said he found that people tended not to order unless he did his 20% off sales. This is probably true, but it's also possible to shoot yourself in the foot with those kinds of sales. If people know you're going to frequently do sales like that, they'll wait until the next one, and you've effectively lowered the prices on all your products. I think he needed to price things such that 20% off still put him in the black, and the normal prices were even more lucrative. This will reduce impulsive purchases, of course, since the prices would no longer be as low. But at least the pricing itself wouldn't be driving you out of business.
But it's also possible that the downturn in the economy is enough to ruin the business. Armor is a luxury, and those are the first things to take the hit.
This really saddens me, since it's so rare to find an armorer that puts the customer first. And his stuff is solid. This is a huge loss to the community.