There is no expectation of privacy in the US if you are in public. You could literally walk up to a random stranger, take their photo and post it online. This is basically the entirety of the genre of street photography.
What you cannot do is license that photo for commercial use, since you don't own the rights to their likeness.
Yes.
The way this photographer is conducting their business is standard in the photography industry. Here's a list of reasons why most photographers won't give you the RAW files