Losing to someone that deploys this kind of strategy hurts for sure but come on, if someone sits out the early stages of a tournament ( when the blinds are small relative to the stacks, ie large "M's") and then 'wakes up' with a large re-raise to your initial preflop raise late-on or around the bubble stage, what are you going to do? Call? All-in? Even with a good but not the best hand.
Is poker not a game of incomplete information? And have you not been given the missing piece?
Sure he/she could be
bluffing, but does their play up until then indicate that? Would it not be better to let a bluff go than go out of the tourney and resent someone else for your own mistakes. (yes and I have been there myself)
Much of the problem of playing against this strategy is to do with awareness of the table and players, and an honest evaluation of your own hand in my view.
Yes Full Tilt allows people to sitout and still place but they don't allow them to enter the pot for free. You do.