Excellent discussion.
I wonder about the people saying you should have drawn and kept the guy there, though. There is no question that this was a deadly threat while the gun was being pulled on, but once the other guy disengaged and started to leave, isn't simply letting him leave and reporting the incident the best course of action? It seems like keeping him there is more likely to result in someone getting hurt -- especially if this guy has a friend or two right outside, and they have guns of their own.
It also seems to raise the probability that you will have to pull the trigger, which carries costs and risks even if you ARE 100% in the right. Especially in this case -- you were faced with the prospect of having to shoot a (at least visibly) unarmed man. A good shoot is a good shoot -- but the burden is mostly on you to prove that. Why take that risk if the other guy is willing to back down?
Most of us aren't police officers. Even if we have the training on how to keep someone subdued (and most of us don't), we still lack the equipment (do you carry handcuffs? what about a radio?) to do that safely. We're talking about a whole other skill set here that is distinct from shooting. Not to mention the legal protections that are extended to actual LEO's that go above and beyond those given to non-LEO's. The whole "citizen's arrest" concept seems to place you on very shaky ground, legally.
In my mind, you shoot if you have to shoot... but if you aren't immediately going to pull the trigger, then the next priority is to place as much distance between you and the other guy as humanly possible. Letting the other guy "get away" seems like a reasonable way to achieve this.
The ultimate goal is to minimize the consequences to yourself and any innocent bystanders. The result in this case might have been mostly dumb luck -- but the outcome was the best that could be expected.
In the end, the OP put his hand on his gun, and the other guy backed down. This was the minimum amount of force needed to end the attack, and was therefore the correct amount of force to apply.