If it's true that he did sell the laptop online, i think it's fair he got that "public display".
I don't really think so. First, you have to consider the option that it got broken in transport. But even if he did sell a broken laptop etc. as the buyer claims, I think the buyer should have tried a bit harder with legal means. We don't live in the wild, wild west...
Even wiping it is no guarantee that the data can't be recovered.
If you do a proper full-disk wipe, ths disk won't be recoverable. Sure, the NSA "might be able to read magnetic residue data", but if that stops you from selling a drive, I'd recommend some anti-paranoia treatment ^_^.
It's true that file-based wiping shouldn't be trusted for that kind of stuff, though - especially of linux systems with file-data journalling filesystems (as opposed to NTFS and other systems which only journals file metadata).