Nah, I don't think sniping is dishonorable. But it undeniably DOES give an advantage. In this particular case, the other bidder was someone who I'd previously had several good ebay transactions with, so I felt that it was the right thing for me to do to level the playing field.
Mind you, the auction was for an item that I was definitely interested in, but one that I wouldn't have been devastated to lose out on either. If it was something I absolutely couldn't live without, I probably would've sniped it regardless.
And yes, it's interesting that the other bidder sniped, but that's OK - even if he had won the item. The possibility of being sniped is always part of the game.