It wouldn't surprise me one bit if the law was on this guys side. Lucas didn't try to protect anything accept the story back then. He got Fox to sign over rights to the story, movies, and merchandising, but I'd be damned surprised if he made this guy sign anything and didn't just say "Hey, can you make some costumes that look like this?"
Lucas takes copyright very seriously these days, but back then he didn't expect it to be so popular so he wasn't careful about protecting the copyright. Why he's going after this guy now is beyond me. Plenty of groups sell their "extra" armor on eBay all the time. I guess since this guy is making a living doing it, Lucas finally realized he should try to do something about it.