They were told their original idea wouldn't work, and they were put in a highly stressful situation of having to come up with a new idea under a short deadline, with high expectations. It doesn't matter if PG was nice about it, there was an enormous amount of pressure put on them to do something to be worthy of their position, pushed along with the implied message that that's what founders do - they can make magic from thin air, instantly. The cult of the founder. It's no surprise that this made him stressed and unhappy. I wonder how many people have been through the same situation, with YC and beyond, but will not speak out.