Interesting. I don't think I would have done the same, and even with time to think long and hard about it, I still would have gone after him with all my might. I don't think letting him off with just a warning is in any sense "justice" nor in the end was the smart choice. There's something psychotic about harassing someone you know for YEARS, anonymously, in such a vicious way as he did. It's just cruelty on a level…
I wouldn't want to ruin a 17-year-old's life, either, but I wouldn't hesitate for a moment if I felt my family was in any danger. We don't know the relationship between the OP and his friend that might mitigate the "any danger" part.
On the other hand, kids' lives are ruined in the US (and possibly other countries; I don't have enough experience to know) on a regular basis because we want to have "justice" at all costs. Justice is important, but so is mercy. Mercy (NOT rolling over!) is, ultimately, what will progress society.