Yay for unverifiable "quotes" taken out of context :p
Seriously though, let's just take a quick look:
"Name me one popular game with motorbikes?"
Seriously, name one AAA title with a heavy emphasis on motorbikes. Sure that doesn't mean this couldn't be good, but there is a reason we keep getting more of the same: People WANT more of the same.
"Collecting giant coins feels unrealistic to me"
With the rise in popularity of "joke" reviewers like Yahtzee, that is actually a potential concern. People might mock a new game for stuff like that. I for one think it is crap, but at the same time, a single catchy bad note can kill a game. Look at Alpha Protocol. Most of the reviewers pointed out it was very rough around the edges, so the game has a rep for being a "buggy piece of crap". Although, that might be deserved.
Or Steam. A few games had problems being "modded" (because the mods were closer to hacks due to no mod support :p) and now people always assume you can't mod a Steam game.
Face it, PR is important. Give Yahtzee and the other idiots a chance and a game could have gotten pegged as "That goofy game where you run around grabbing huge gold coins. What a Mario ripoff".
It didn't happen, but hindsight is 20/20.
"I can see this working as a Facebook app"
That right there just shows that the dev is a bit of an arrogant jerk (and this set of quotes does NOTHING to reinforce that :p). Looking at the wiki page, this basically would be a perfect facebook game. Relatively simple, "indie-esque" graphics, and an emphasis on competing against others for high scores.
Either way, that isn't actually a rejection. So his pretending it was says a lot about just how willing the guy was to compromise.
Yes, the concept of a game shouldn't be compromised too much for sales. But, at the same time, look at Introversion and Darwinia/Multiwinia. Microsoft basically called them idiots and told them to fix it for the consoles, and they eventually realized they should.
"We want games that are less about fun right now"
Ah, yes. The king of all quotes. It sounds REALLY bad on the surface. But then look at the game itself. They don't mean "we don't want fun games". They mean "We don't want goofy games" and the like. I don't think anyone would ever call the Warhammer 40k universe "fun". The GAMES might be fun as hell, but the universe is pretty grimdark. And look at the trends, most publishers are going for grimdark, gritty, etc. Even CD Projekt are making a pretty gritty game with TWEE/TW2.
"We love the theme, but with a different game"
They basically felt that the theme had merit, but the game itself was a bit weak. And frankly, I agree. I didn't like Trials, and I doubt I would like this. Clearly I am not indicative of the fanbase, but it is something to consider.
"We believe the iPhone will be largely unsupported"
That is actually a pretty big concern for a lot of game devs and publishers right now (seriously, read up). Apple is making it a point to stifle the hell out of third party tools and the like (they are even probably going to ban Unity). That isn't how you build up a fanbase as far as games go (look at the Zune. Nobody really games on that).
"Can Joe be a monkey? We like Monkeys"
We laugh, but look at this thread. We like monkeys too :p.

^ Fuck off.

Its sad.
It would have cost them almost nothing to release the game, but they still refused. Greedy bastards! Always after the hugely hyped AAA titles.

Game of the Year 2011

I can't wait to play The Sims: Tech Support.
"No, YOU don't understand. I don't have an 'any' key! You tech support people are so STUPID!"

Do we really count those as AAA titles? I don't mean in terms of quality, I mean in terms of sales. Because THAT is what is important as far as publishing goes.
I see far too many people who claim that Yahtzee is a great reviewer and the like. I personally don't see it as too much of an issue, but at the same time, I can see a publisher being concerned about getting a "catchy complaint".
So if you made a platformer and were told it would sell better on a console than a PC, you would be insulted?
That is kind of what I mean by the dev being an arrogant jerk. Okay, if you were making a first-person shooter or an RTS, maybe it would be strange. But this is pretty much a textbook social networking game. Is a game less fun if it is played in a browser?
Fine, drop the grimdark (was going for the opposite extreme :p). Modern Warfare 2 isn't a very "fun" setting. Neither is The Witcher. Or Dragon Age. Or Mass Effect.
This suggests it could be http://www.gamesindustry.biz/articles/matmi-unity-looks-like-it-could-be-banned-from-iphone
Don't get me wrong, this is still funny. But once you look past the spin imparted by the site it was posted on (and the topic title), most of those aren't that bad. Maybe not stuff we all agree with, but not too crazy either.

I know Trials HD did well, but I'm not sure how well. Trials 2 sold over 200,000 copies, which is better than many AAA games.
The PC/console divide isn't really an issue to developers. The normal game/Facebook game divide is. You're saying a game can't stand on its own merits, has to be free to attract consumers, and doesn't have enough content to be a real game.
I didn't actually read the article because I don't want to support having to register to read news articles, but of course a developer who uses Unity is going to be afraid that it's going to be banned. It is a bit up in the air (because Apple never tells developers anything), but most people in the industry strongly believe that the infamous 3.3.1 provision added to the dev agreement (which were added to disallow Flash based apps) will not be applied to Unity. Furthermore, it was added three months ago. It's quite possible Unity might be left waiting for an answer if Unity was going to be allowed (it seems to be Apple's nature to obfuscate as much of their thought processes as possible), but if Apple was going to ban Unity, they would have banned it quickly. Not to mention the fact that they would have to remove several top sellers to enforce their Unity ban, which would hurt their pocketbook a great deal and, if stock owners were feeling testy, provoke a lawsuit objecting to Apple's apparent distaste for money.

Games that are less fun than those released today? Is that even possible? . . .=)

Didn't know that about Trials. But let's Captain Planet those two.
Isn't it an insult to be told your game should be sold as a budget title? :p
Seriously though, there are lost of beloved facebook games (all the *ville games come to mind). If this guy wanted to be arrogant and refuse to be "lowered" to that level, fine (it seemed to turn out well for him). But to think the publishers are bad for suggesting it is just arrogance.
Yeah, I do hate that about the site.
In summary, the guy got a tip from a "very big company" that may or may not be Apple. About as much backing as this article, but worth considering.
Also, aren't phone games also an insult to the almighty dev? :p

I certainly hope it was Activision. I don't want to think there are more publishers out there like that.

GTA 4, Saints Row 2, Burnout Paradise, to name a few. But then this isn't a major AAA title we're talking about here, is it? So the comparison is irrelevant.

Facebook doesn't support anything remotely like this game, technology wise. And even if it magically did, I don't see how this game could be adapted to the usual craptacular FB business model.

Every developer has a tier that they think their game is at. Developers of big games think that their games should be sold at the $50/$60 price tier, developers of smaller games may be fine with a $20 or $10 price point, or maybe even $5 or $1. Generally indie developers realize that they have both less initial investment and less content, so they market their games at a lower price. To say that someone's game should be on Facebook is to say that their game is worth nothing. The guy working at the publisher probably knew that.
I'm sure some developers would take it as an insult to say their game would be fit for the iPhone, as unless you're a major publisher, your games have to be either $1 or free to sell any copies. However, there is something infinitely more satisfying to seeing your game running on a dedicated platform as opposed to a browser.
Personally, it would only be good for my company if Unity went under, but I doubt that Apple will (and I don't think they should!) ban Unity. If the "very big company" was Apple, I would wonder why they would decide to tip off a random iPod developer instead of telling everyone or even just Unity.

Don't Facebook games have ads? Which is a CRAPTON of money.
But as far as the iPhone, that is basically it. It becomes a matter of what the dev wants. But if someone was shooting for the PSN store and the iPhone app store, Facebook isn't that big of a deal. Instead, the dev (and a lot of people) attach an unfair stigma to that.
Just saying, that plus actually posting this crap (which I would be surprised if half of those were actual quotes) makes me see the dev as an arrogant jerk.

The thing is that it's not only the dev, it's the culture, so I don't think it's really fair to call him out on that, as it seems to be a pervasive notion. I do agree that it's stupid (and ads do make a ridiculous amount of money, at least on the iPhone).