Question is this : how do you deal in general with reasonable bad players who have ginormous stacks?
hmm, I usually make sure I 'x' out of all IE windows, turn off my cell phone, minimize AIM, perhaps chat with him a little bit and make him feel comfortable. Then I lick my lips knowing opportunities like this don't come around very often.

Do you avoid them?
maybe if you have sympathy for them. Like if you're the kind of guy that says, wow, when that ginormous stack is MY stack, he's going to be heart broken. But in actuality it puts a great big smile on my face.

It would seem to be +EV to match up against "weaker" players,
yes, correct. Just stop there. Everything else after this is awful.

but by doing some simple math it isn't tough to see why the size of this guy's stack was such a powerful weapon. He could chase just about anything he wanted and know that eventually he would bust me.
similar to the roulette theory where you pick red or black everytime and double your bet everytime if you lose. It's inherently flawed, but you need to figure out why yourself.

Is there any argument to be made for avoiding a situation like this because it's likely that eventually he'll bust shorties like me - no matter how many times we get it in ahead?
because you feel bad for him