How the heck did I end up in GBD?
Part of the problem with fighting games is that the players who aren't quite as good get discouraged and end up giving up on a game. I'm sure everyone can agree. But sometimes there's a less severe but still important mentality that ends up rearing it's head to many players time and time again, especially casual.
The mentality of a losing streak.
Everyone has a different limit but pretty much everyone DOES indeed have that limit where after so many losses, they just can't muster the will to try or go on. Let's be honest, most human beings are not The Determinator.
Now losing once is no big deal. He can probably shrug it off and keep on truckin' so to speak. But when you run into loss after loss after loss, it begins to build up. Mostly likely, he begins to go into fights expecting everyone to be able to massively whip his *** into paste, and expecting defeat. But as time goes on, the defeats just pile up to the point where he feels helpless and has little choice but to simply stop playing for a while.
Solution for your friend: FIGHT OTHER PEOPLE. If he can't beat you, then that's his problem, and only he can work on improving that. But try getting different people involved. Preferably you want a group of people that you can both play and practice with on a regular basis. All he has to do is learn how to beat one person, and the rest will follow.
Or play Melee.