Nice post, pkrplr. you're perfectly right that you can raise a much wider range of hands than what you can call with, as you will miss the flop 2 times out of 3 and the aggressor will just eat you alive when you miss. Yet folding too much is not much fun, especially if you can't steal blinds from people on your left to compensate.
I assume this was mostly blind vs. blind, he was SB and you were BB? The standard defense against someone who steals more than his share is to resteal lighter, i.e. reraise him, often simply by shoving all-in if stacks sizes permit. But you need to start defending soon enough so that your stack allows you to reraise to something like 3 times his raise, otherwise he has proper odds
to call with any two cards and you loose the advantage of folding equity.
In more general terms, whether an aggressive or passive line is the best strategy overall really depends mostly on the payout structure. Let's take a theoretical example. Imagine you have 3 people left and the payout is $100 for first, $50 for 2nd and $30 for 3rd. Imagine - theoretically - that playing aggressively guarantees that you'll have 50% chance of finishing 1st and 50% of finishing 3rd but never 2nd, while playing passively garantees 2nd place 100% of the time. Then aggression is the best choice as your expected profit will be .50x100+.50x30 = $65 instead of the $50 for 2nd place.
Most SNG and MTT payouts are structured in a way to rewards aggression, but there are exceptions. Beginner SNGs on Bodog have a linear payout that makes aggression/passivity equally good. Double-or-Nothing on Pokerstars
and satellites have a flat payout that discourages aggression completely.
For those interested in the details of how the payout structure affects your decisions for particular hands, you should research what is call ICM, i.e. Independant Chip Model, which is a mathematical tool to translate stack sizes into corresponding $$ value based on the payout structure. This allows you to make decisions in order to maximize your $ expected value
($EV) and not just your chip EV.