Eh, it's a good answer and shows good instincts, but they still want to know how he would design a system if one was necessary. There's no need to be ridiculous about any of this from either perspective, which is why it should never have been a "fail" without the original interviewer simply saying "That's a solid answer now tell me what you would do if you had to build something new". I mean look how much time he wasted for everyone including his own CEO by being stubborn about it.

If the numbers can be satisfied by a Postgres then thats the correct answer. The interviewers fucked up, because they sized the problem wrongly.

This is the same issue that was prevalent when the industry switched from HDD to SSD: some system design questions suddenly became trivial, because the IOPS went up by magnitudes. This is not a failure of the interviewees, who correctly went with the times, but a failure of the interviewers.