Edit: in a further comment, you assert an unspoken insult being communicated in a perfectly neutral sentence. I guess what I'm saying is I bet you bring quite a bit of the negativity you experience to your interactions.
I am not convinced that your assumption about his negativity is any more valid than his interpretation of his experience.
My own experiences in SF has been positive. I've found people are generally very excited about what they are doing in life, optimistic about the future and most importantly, willing to lend a hand. (This is in huge contrast to the cut throat image of the valley in the media; while individual startups and industries within tech may be cut throat, I wouldn't describe SF tech world as "generally cut throat")
One thing to keep in mind is SF has a fair share of folks who move here for their first job. These people are just entering the workforce and are maturing more, not less, each day. I've seen some pretty radical transformations of the same people over 1-3 years. A lot of the portrayal of the Valley in the media is of a fixed non-evolving mindset, which again, is the opposite of my experience.
It was entirely certain that he did not understand that he repeated the 2nd option I gave him. Furthermore, when I tried to correct him, he behaved as if I was lying to him.
I take it you're not familiar with the wonder that is Yes, Minister?
(More broadly, and to explain the joke for the benefit of HN, a large amount of British oblique humor and especially political and civil service culture relies on the art of the indirect insult.)