From what you said it sounds like you both have a lot in common. So there's at least a chance of a relationship. Are you accepting of his shyness? Or maybe you haven't gotten to know someone very shy before. All you need is the right line to assuage his fears. You could say things like:
-isn't this funny, all this set up, the only way to end would be to go on a date?
-you don't have to be scared of me, trust me (reveal one of your own problems to him, we all have insecurities, he's just bad at hiding them)
-tell him, it's okay to just try to be friends, no expectations.
Think about it, all the expectations generated by the "setting up" process, it's really hard for some people to deal with.
And every person does it. Even you yourself, the original poster, are building up expectations--the evidence, that you are so concerned and off put by his shyness. You are expecting that he will be the same way in a relationship as he is now. But you can't know that yet, it's an expectation.
