No one has to marry or not marry anyone for any reason. It is somewhat troubling that a young man would suddenly decided after preparing for a mission his whole life that he doesn't want to go on one, but that doesn't qualify or disqualify him for an eternal partner.  
 
I still think that if he is able and worthy that he should reconsider going on a mission, this is a sacred duty of the Priesthood.  
 
I would try and find out what caused such a dramatic change in him. There must be an underlying cause, one that you as his close friend could help with.

Short answer: No. 
 
Should you marry a returned missionary? 
 
Consider this that recent prophets have said that it is a commandment, or closest thing to it, that every worthy, able young man should serve a mission. 
 
Marrying someone who was worthy and able bodied would make me personally wonder what happened that they not only didn't but why they didn't want to serve? It would make me wonder how strong this person's testimony and devotion to God is and will be. 
 
I served a mission with elders who left for a mission as old as 34 years because they wanted to serve and felt the importance. They left careers, family, girlfriends...all in order to serve. There was little question their devotion and strength in what they believe. Could they teach the gospel to non memebers? You bet because they could say they left all to share what meant most. 
 
Going on a mission not only teaches you valuable skills, but also allows you to practice chartiy and selflessness to others, so needed in a good marriage. 
 
Can one get by without it? yes, but those qualities must be learned. Do you really want to take a chance on something with so much meaning (eternal marriage) and have doubts? 
 
I would find out why the young man has changed his mind. There may be a valid reason. It may be though he could be that he lacks positive encouragement or is afraid of "losing" you. You may have the ability to be powerful influence in this person's life that could literally bless hundreds of lives directly, thousands indirectly.

What if the young man is not a virgin and is therefore unworthy to serve a mission? Can he still have a temple marriage and be sealed?

Yes, he can repent and gain forgiveness and can be worthy to go to the temple

Comments like these make me ill. 
 
I am LDS but I didnt serve a mission. I wasnt worthy and I had to come home early.  
 
Does this make me a bad person? No, let me direct you to an article from the Ensign: 
 
http://graceforgrace.com/2010/03/28/the-lds-church-is-getting-away-from-the-thou-shalt-marry-a-return-missionary-mantra/ 
 
It makes me sad that someone thinks I dont deserve to date them because I didnt serve a full mission.