I'm a firm believer in tough love. Sometimes people need to hear the truth, or at least exactly how you feel about the situation. Sometimes it can break up a friendship, other times it can make the bond stronger. You have to be prepared for it to go either way, because some people can react very badly to you holding a mirror up to their issues.
As for him coming out, that's a personal choice. No one should ever be dragged out. He has to come out in his own time, when he is ready to do it. His reluctance to come out could be directly related to his competitiveness and low self esteem. The fact that he belittles or judges others means he doesn't think much of himself, so he has to show how much worse are others are than him to make himself feel better.
I don't know what his home life is like, but these are signs tat his family life isn't that great. These are some things he may be able to deal with effectively when he gets older, maybe out on his own, but he more than likely needs to see a therapist or a counselor who can work with him on some of his issues. If his family won't help him see someone, it's something you can encourage when he's able to make his own decisions.
I welcome your thoughts, let me know if you want to talk more