I agree with 2600 - If the guy didn't want you to read the journal entries, he would have removed them before giving you the notebook. I say when returning the notebook, simply thank him for trusting you enough to share it with you.

Know that as you get older, it will be very rare that you have a relationship with someone who doesn't still have some warm feelings for someone from his past. In fact, I'd worry more about someone whose heart is a blank slate regardless of previous relationships.

Clearly this guy is interested in you now. If you like him too, give it a go!