Is a friend's acceptance of the title "Wasta" and his preference for it over other titles considered a legitimization of the sin he committed?

Not all mediation is forbidden. If the mediation was forbidden, then its perpetrator must repent. Merely committing a sin does not mean that one has considered it permissible in a way that constitutes disbelief (kufr), as that has its own conditions and regulations. Considering something permissible (istihlal) may constitute disbelief if it involves deeming lawful something that the Sacred Law has forbidden, and which is known to be forbidden by necessity of the religion, such as believing pork or fornication to be lawful.