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That's a very good point.  I think you are right that this card is worded in a way that makes it break when you play it on an opponent's development.  The rulings we have are pretty clear that you can't sacrifice an opponent's card, so Rip should either force you to only target your own unit, or say "it is sacrificed" rather than "sacrifice it".  Mallumo has put in a request to Lukas for clarification, so we should have an answer soon.

If you control this card, you trigger its Action only when you choose, but also only in response to a unit becoming corrupted.  It does not create a constant effect that damages all future corrupted units.

So you played it correctly and your opponent is wrong.

Keep in mind, this card does not trigger off of Warpstone Excavation

Our Rip ruling is a little outdated and needs to be corrected.  If you look at the official FAQ, you will see that section has changed slightly and no longer says anything about what happens to the flipped up unit. 
If the revealed development is a unit
that cannot be in play (such as a Hero
card in a zone that already contains a
Hero), then the unit that caused the
illegal state to occur is immediately
sacrificed.
If you flip up an opponent's unit with Rip Dere 'Eads Off, it is not sacrificed at the end of the turn (based on the Bathe in Blood Q/A you quoted) due to Rip's effect.

In the 2 Hero example though, he is not sacrificing your unit.  He is causing an illegal play state that can only be resolved by you sacrificing the unit you played from your hand. 

Two heroes cannot be in the same zone at the same time.  The Rip ruling you are quoting is just telling you what to do if that somehow happens.

Images and text for 6th battlepack emailed to you.

Yes, nice detective work :-)

It means what you said at the end.  You may use his damage counters to pay for things as if they were resource tokens, but only during your quest phase.  You can't just remove damage from him to add 1 resource to your pool of resources and then spend that later in the turn.

Just updated the rules summary about this today, but here's the full answer:
Whenever you see the word "becomes," then you know that the card is considered to have changed states for as long as the effect applies, but it does not physically change states. So with Judgement of Loec, the unit it is attached to stays face-up and is considered to be a development for as long as Judgement remains attached. The unit is normally no longer considered to be a unit, has no power or HP, and cannot defend (note, however, that effects such as Bolt of Change, Spellsinger, and Kairos Fateweaver are all able to affect it in this state).

Seb has the images and text, I'm sure he'll add them as soon as he can.

No, cards like Plague Bomb have their targets chosen when the Tactic is played.  You then have an opportunity to respond before the damage is assigned and applied.  So you can sacrifice the unit to Slave Pen in reaction to your opponent targeting it with Plague Bomb.

It has to apply to only the unit.  If it applied to attachments as well, Witch Hag's Curse would blank itself, which would then cause the unit to not be blank anymore.

Yeah, nothing can die while you are assigning damage.  Stuff can happen before, then you assign, then more stuff can happen, then you apply.

Good catch.  I changed this example around a lot to get all the effects in there, so I totally missed that.  I'll update it.