$1/2NL hand game. What did I do wrong here. Please advice

[idog519]

I am a decent winner at my local b&m here in nyc. This hand blows, but did I something wrong in this hand: I get 8h7h in late position and after a few limps the flop come 8d8c6d. Middle position bets $5 into a $10 pot and I raise to $25. He calls. Turn is Qs. He leads and bets $25. HUH? He called my raise on the flop and bet on the turn. He must have an 8, perhaps with a better kicker. I think to myself. Well...I don't raise because if he puts me all in I have to fold...so I call and see the river a Qd and I have a boat. He goes all in for about $150. What do you guys do? I put him on an 8 b/c when he called the raise I put him a flush/straight draw, but the bet made me think that I had him or we were splitting the pot. Well, I called and he turned over AQo. The odds of that card fallin on the river is 22-1. 5% WTF? Why he didn't raise with that hand pre-flop is beyond me. HELP! What do you guys think of this? Did I play this wrong in any way?