[steamboatin]

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He has to play the chips that were on the table when the hand started.

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Yes, which is why the dealer is unacceptably negligent here.

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Little harsh on the dealer aren't we?

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Maybe the tone and word selection was harsh, but that doesn't make it less true. It is entirely possible that if the other player had raised, the dealer would have required the villain to put his chips back on the table if he wanted to call.

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Yes, but it that such a big deal? If he gets raised, he either puts his chips back in play or folds. I don't see any reason for the dealer to panic because the chips came off the table. Obviously it would be better if the chips stayed on the table but negligent is way too harsh a term.