I think there's little doubt "Eric" should not be allowed to continue as is. However, I'd be wary of firing him, since it seems to me that much of this problem is not of his own making. It's easy to say his expectations are unrealistic, but there are hints in the profile to suggest the hiring manager shied away from being explicit, so allowing a certain amount of misinterpretation to creep in.

I've seen several similar situations before, where the summary of events has been collated to a fair degree by the very people who did the hiring and subsequent managing. The summary carefully points out certain key pieces of information that have been imparted to the employee, whilst carefully skirting around the fact that that information was imparted in short, ambiguous asides at points in conversations where they could be slipped in without their true importance being spotted. I'm not suggesting this is definitely the case here; just that it's as likely as not.

As I see it, a manager has responsibility in three main areas; selection, training and supervision. Eric was poorly selected, insufficiently trained (for the wider responsibilities of his job and/or career path) and inadequately supervised (particularly in management of expectations). Personally, I'd say "Evelyn" is a more immediate candidate for firing than Eric.

So my preference would be for a "cards on the table" interview with Eric. Once he knows the true situation, he's as well equipped as the company to re-evaluate the professional relationship. It starts the justification for subsequent job termination if it should become necessary, but also establishes a new starting point with measurables - everyone knows where they stand, and by what criteria the whole situation will be judged. And, it should be added, I've seen a few people treated like this who've gone on to become hugely valuable colleagues.