i think a big mistake you all are making is saying that he is a favorite to win the hand on the flop. an OESFD vs. a set only wins ~40% or less. the guy with the lower straight draw really doesn't change your odds of winning, all he's doing is lowering the odds for the guy with the set. So, you're 38% to win this pot...

you'd actually be more likely to win against any made straight than you are to win when he has a set, but your odds would still only be in the 40's.

If i were you, i would call that raise, hope he calls to see a card, if he reraises hard i'd fold to the made straight or set.