I'd say that their hiring recruiters might want to look at learning a few manners.

Talked to the in-company recruiter. Everything was fairly normal: going over my career history, talking about the project I'd be working on.. until we got to the topic of desired compensation. He said that they wouldn't be able to meet my expectations (filled it out on application) and was wondering if I'd be able to go any lower. I let him know (very politely) that I was interviewing at other companies for that range already and I probably wouldn't because most of the job offers I've been seeing are in that range.

As expected, he said that he would suggest that we end our conversation... but then went on to say that their company is doing very complex things and that he doesn't see me a good fit there.

Lol nice.. I assure you that wouldn't be the case, but regardless, it doesn't justify the rude comment.

Would you consider a lower compensation?