Did my friend want a "friends with benefits" relationship?

I really don't see a question here. You already know the answer, yes, this is what he wants. Obviously. And you are simply irritated and may be also feel betrayed by someone you considered an old friend. We don't expect our friends to turn into immature hormone driven beings. It's ok to be mad at the situation. You really seem to be grounded and someone with a good set of well established values. This whole thing is not bringing you anything good, so stop pouring your emotions into it. He is not treating you like someone who wants to have a fulfilling relationship with you. There is no way he is going to make you feel better about yourself, quite the opposite. It's sad, but sometimes we have to let old relationships go, when they bring us nothing but turmoil. Stay away from him for a while, if he doesn't "get it" and continues to pressure you with the same thing, stay away for good. You have much better things to do with your Life, don't you?