I think it is pretty unethical to give someone access to company data without the companies permission, and especially to allow that person to actually work on company products.

I strongly disagree. Even if we ignore confidentiality and security issues, there is a fundamental difference between contractors and employees. Employees are generally paid less than contractors and are provided stability inn return the company gets a stable employee.

Contractors are expected to be shorter term and change tasking if new opportunities arise, even for a short time.

If both parties enter into a deal then it's fine, if one is misrepresenting themselves it's not.

> I don't fault the guy for the arbitrage

Well, it's entrepreneurial, but he's almost certainly also violating all kinds of employment stipulations and policies he's formally agreed to (security, privacy, etc.)