I wasn't there, didn't see the event nor know the place or the pilot.
(But then I guess most other posters don't, either.) This said...

thru a thermal and a release into sink. Our proud pilot was unable to
find the thermal

It might have been just a bubble. Happens a lot where I fly.

pattern and landing, he turned and climbed in this thermal. The IGC file
showed that his altitude at the time of encountering lift was 300 ft.

I more than once saved the day with a thermalling exercise at 300 ft
(with a chosen and reachable outlanding field, of course). Every serious
cross country pilot will enconter this situation sooner or later.
Whether it is appropriate in the circuit depends on the local situation
and the actual traffic, which I don't know.

asked him 1 question as he displayed this flight on See You. "How Low do
you want to spin?"

Why should he spin just because he thermals? Fly fast and carefully
enough and there's no reason why you should spin out of a thermal,
unless it's not extremly gusty.

spending a considerable amount of time in the mountains within 500 feet
of the terrain.

Which I consider absolutely normal in the mountains.

I am doubtful as to his ability to reach a landable area
during this portion of the flight.

In the mountains, the terrain often descends much faster than the
glider. So those 500 ft may be good for 20 miles. (Again, depends on the
local situation which I don't know.)

This pilot is in his first year of private ownership, cross county
soaring and may have almost 200 hours of total time.

If this is 200 hours in one year and cross country, then I would
consider this pilot as fairly current. 200 hours TT isn't exactly high
time, but it isn't beginner level, neither.

Again, I don't know the pilot. He may or may not be a bold, dumb and
reckless idiot. I'm just saying that your "facts" don't say anything
about the safety of the situation.

Stefan