1. Many of the facts in your HR files are based on heresay - what your colleagues/managers/HR personnel think about you. These are highly subjective facts, very domain and company specific. Airing those out without context is a breach of privacy and can cause great damage to the employee down the line.
2. These files belong to the employer - he can alter them to show whatever he wants them to; either in real time, or after the fact, to justify wrongful termination etc. I've actually seen that happen, when a pregnant colleague of mine was let go, and the management later invented a non-existent reason (right before they settled out of court).
3. Privacy here goes one way: if you, the ex-employee, decide to protect your good name, or retaliate - maybe by discussing what you think really happened, you may be violating the NDA you signed. At worst, you could be sued for libel. Most of the time you have no facts on your side, and you can refer to #2 to see what happens to the facts aligned against you.
Finally, imho, if your employee was caught in the process of criminal activity, report him to the appropriate authorities and fire him. Letting him go quietly, only to use this fact against him later, smells of shoddy behavior to your current and past employees, and to your customers.
