My answer would have been the same. When asked to work it out, I would have pointed out that I simply wouldn't; not because I don't know how, but because if I need to know the number of bits it takes to store such a specific number, there is probably a reason. That reason could be storage of some form, such as wire protocols or files, and I don't want to fuck it up because I miss a step or misremember something. So, no, I won't even bother memorizing it, let alone, calculate it by hand.
It seems like you aren't capable of differientating between an interview and real work. This isn't an exercise to see if you can figure out how many bits it takes to store a number. It is a test to see how you approach a problem, if you can break it down (2^10 = 1024, 2^10*2^10 = 2^20 = 1m), and arrive at a solution. It's a simple problem that doesn't require you to be a math wizard.
And part of a real job involves solving real problems. In an interview, you have a very limited time, so you have to come up with questions that test the candidate's ability to solve problems within a certain timeframe.
