To me the fear Ennis felt was his love for Jack and what it meant. It would have made him what he hated most, "queer". The whole Earl and Rich thing was a warning Ennis gave to Jack. Jack was making a proposition, Ennis had no intention of going along with. Ennis knew what queer was, what bashing was, what death was. He also knew of these dangers the first night he "took" Jack, and the second night he gave in to Jack. He knew it all but had and loved Jack nonetheless.
Ennis loved, he knew love, he loved his girls, he loved Alma. But loving Jack was counter to who he believed he was, but he was in love, and this man was who he desired. And Ennis was so much more with Jack than without him, he felt real love, knew the joy and sharing of sex, and in turn Ennis feared not Jack but the what Jack represented, because it made him in his mind what he learn to hate and fear. Jack was a shock to Ennis's belief system, and what he grew up to believe, and this all but faded away when he was with Jack. That's what was dangerous about loving Jack, and Ennis knew it.
Ennis could not be drawn into an alternate universe, a life style counter to what he was taught, an abstract idea of a "sweet life" with Jack that he couldn't believe in , but kept going back to him, for twenty years, love desire is a hell of thing to fight.