[phish]

I disagree with you all who think that this has been horribly played.
First, the pre-flop call is a no-brainer. He's small blind with two players already in, maybe three if BB calls. He certainly has the odds to try to hit a set. Small pairs are much more playable than most people realize since they are easy to play post-flop.
And the call on the flop isn't all that bad either. One, the raiser will bet even with a hand like AQ. His 55 may be best. And if it is AND his opponent(s) make a mistake of checking the turn, he may be able to win the pot. add to that the small chance he may hit a set on the turn. Given the $ already in the pot, it is not at all unreasonable to throw in one more small bet just in case.
The only reasonable argument against that call is that there are two players behind him to act. This would push the flop call to -EV, but I don't think by much.

In fact, I would argue that if you automatically play contrary to this all the time (auto-folding SB in this situation or auto folding on the flop without thinking thru the possibilities), you are giving up significant profit potential (though it will help to reduce your variance).

(and it seems to me that the best high limit players don't shy away from the high-variance but profitable (even if marginally so) plays.)