So the consensus seems to be to bet harder on the flop and totally wipe out his drawing odds. However, since he came out firing, I was also worried about 2pairs and sets - as J_Fish pointed out- and was after information as much as anything. Didn't want to lose too much to find out I was already beat on the flop.
With a draw on the board, yes, raising his bet is a smart way to go.

A good opp though might bet out a set or 2pr this way as well, looking to get raised in which case your hand (with the relatively shallow money) is harder to get away from. If your opp is LAGGy, this is exactly the kind of situation that LAGGs love.