Is This Piracy?

Recently, I discovered that one of my affiliates has uploaded my product to his WP Blog.

I discovered this because his site was listed in a Google search for my product:
For example: [PDF]http://his-site.com/wp-content/upload/2013/01/name-of-my-product.pdf.

I've tried an insite search for my product - to see if I could locate a post or page that mentioned it, but nothing apart from the upload folder appears. I suppose this could mean that he hasn't created a sales page or if he has created a sales page - it's an image/graphic format.

Last month, his sales were down to almost zero but previous to that he was consistently achieving approx 20+ sales each month. (for the previous 4/5 months).

I'm struggling to come up with a legitimate reason for uploading my product to his website apart for he's decided to pirate the product and sell it direct to subscribers etc. NOTE: I know that it's not life-changing amounts BUT it's principle.

This really puzzles me because he appears to be a honest guy (with a young family - if the photos on his blog are genuine) and I gave him a higher affiliate commission rate - 75% instead of 50%, on a $20 product). So, although I don't make that much of the product, he would be robbing me of the opportunity to build a list as well.

I'm I being paranoid? Are there good reasons for uploading my product that I've not considered?

And if you don't think that I am being paranoid, how would you resolve this situation?