This assumes you know their financial situation. Afaik we know jackshit about it. And even if they purchased the PSU, the new GPU wouldn't give much of a boost with that insanely weak CPU.
I guess what I am saying, if I was in the older brother's situation and could not immediately afford to upgrade my younger brother's PC, I would rather use the components in stronger machine and let younger brother play on it, then let it sit on shelf where he can stare at the box. And I wouldn't consider myself asshole for it, on the contrary. Obviously once the full upgrade of younger brother's PC could be afforded, I would put the GPU back into his machine.
Of course who knows, maybe the older brother did intend to keep it for himself and lied about letting younger brother play. In that case, he would be total god damn asshole.