It wouldn't be illegal, since you'd have bought the goods before he charged back (you could say you didn't know he'd dispute the payment). You were dealing with virtual goods, meaning that if he were to dispute the payment, he couldn't prove anything and you would win the case easily, since there is no Buyer's Protection for virtual goods.
If you bought goods and afterwards he charged back, you'd be in negative balance until the case was resolved (for example, I was on -$17.84 for 2 months until I decided to start selling again and get my balance back in the positive, so I was able to buy again).