Long story short, I quit the job, but I had to deal with spam for about a month while I was looking for a different employer. Somehow it was my fault that we were blacklisted by most of the major ISPs and mail services. The IT director was too shortsighted to farm out the spamming to someone else.
Everything worked out great in the end, because I'm at a place now that would never spam and I'm working with bright people on some very cool projects.
So yeah, my advice is quit and tell him why you're quitting if he won't listen to your advice.