Does he have the legal right to sell VectorLinux to Microsoft? Yes, assuming no legal impediments.
Would it be ethical to do so? No.
Since it would effectively destroy an outstanding GNU/Linux distro, it would certainly be unethical.
Since it would aid Microsoft's attempts to squash GNU/Linux and Free software, it would certainly be unethical.
Would it be easy to say no to that much money? No, of course not. I'm not sure what I'd do in such a situation. Personal factors, varying from individual to individual, could make the decision even more difficult. But I know I'd find it hard to live with myself, if I'd betrayed my values -- and all those who use Free software -- by making such a deal. Sometimes doing the right thing isn't easy or profitable.
I really hope this is just purely hypothetical speculation. I love VectorLinux; I don't like distro-hopping; and I'd hate to lose a distro I've become so comfortable with.
Of course, as far as I'm concerned, using a distro which belongs to MS, or has made "patent deals" with MS (as have Novell, Xandros, Linspire) is simply out of the question.