This is pretty fucked up. Rationalizations aside, this really can't be read as anything but a massive invasion of privacy, wholesale stealing of (likely) copyrighted content and a truly pathological misrepresentation. I'm sharply reminded of the whole JT LeRoy fiasco a while back, especially in that whoever it is continues to make obvious lies--almost as though they wanted to be caught, or couldn't help themselves.
As a fan, even though the paladin stuff had little or nothing to do with the personal stuff, I feel betrayed. I trusted her/him.
I wouldn't be surprised if there's some lawsuits in the future, but "Ferarro" probably has some serious psychological problems.
This is just one more reminder of how deeply creepy the internet can be. *shiver*