We had a similar issue in my group not too long ago... although it ended up being resolved very differently. Sometimes playstyles just really don't mesh. A couple of sessions into a campaign, we talked about it when some growing frustration was starting to get obvious, and one guy voluntarily left the group. Those of us who didn't have as much of a playstyle clash promised to keep in touch when we started a campaign up again that might be different, and it sucked to see a friends decline to participate because it wasn't quite working out, but all in all, I'm glad that when folks tell of their interpersonal group horror stories, I get to counter with my example of a situation that I thought was handled quite maturely.
Then again, horror stories can be pretty fun after the fact. I love diaglo's story of going to a game and being attacked by some guy wearing fake vampire teeth who decided to bite someone else in the group "in character" in the middle of the session.