I haven't read the source material, but my take on it was that the guy was just a bad person. He faked being blind, stole from people, and never admitted to anything wrong. He killed the guy who finally found out he stole, and then the local lord or magistrate found out he had been doing stuff like that in other towns. He was just full of excuses and refused to take responsibility.

My opinion on the symbolism is that his demon form being tiny is a reflection of his "small" self. All the bigger demons are the emotions which control him, fear, pleasure, hatred, resentment, etc... I do believe it's the first instance we see in the show of a demon with a backstory shown that doesn't lead you to feel sorry for them. But even his life makes Tanjiro's quote ring true about all demons being pitiful creatures. /rant