No further evidence of his backstory that I've come across, but he certainly seems to be drinking away his past... also he reportedly attacks you if you've got a bounty in The Pale. So he could well be an ex-Blade or a Blade in hiding.
Or, maybe he just stole his sword from a Blade.
Interestingly one of the captives you have to kill at the start of the Dark Brotherhood questline is also called Fultheim the Fearless. Long-lost evil twin? :S