Well whether he means it as an ultimatum or a request, I would tell him that I wouldn't feel comfortable negotiating about it until he was able to be clear about why he was making this request. Once you understand this, you are both in a better position to agree on changes, or to state that you are not going to make that change.
I don't know if he wants this temporarily or permanently. I have seen so often when people ask for something to be temporary while they learn to deal with something - if they don't even know why they are uncomfortable with something in the first place, 6 months or a year later, they aren't any more comfortable with it because they haven't been working to change it because they've been operating in the "out of sight out of mind" way. This isn't always true, but it seems to be pretty common.
I hope he is able to explain why he is making this request, I know I'd be very reluctant to agree even temporarily to a request like this if somebody wasn't in touch with why they were making it. I think you know that you wouldn't be happy with this permanently, from what you said.
I'd also be wondering if it is just the casual sex or if its other relationships (or the POTENTIAL for other relationships) at all. If you gave up casual partners but found yourself interested in a more serious relationship with somebody, on the level you have with Wolf or him, would he be uncomfortable with that as well? Always possible if he really thinks on it that could be one of his main discomforts.
Happiness will never come to those who fail to appreciate what they already have.