Interviewee: OK, I can consider it if you promise me a reasonable revision in a year.
2:
Interviewee: Whats your offer?
Company: Z, Z<Y
Interviewee: That's too low. I want X.
Company: You're asking for X when we offered Z. That's too much of a difference and it doesn't sound reasonable to us. We find it insulting. Let's end it here.
Can't tell whether it is sarcasm or not. A "Company" might get insulted, but, lucky you, you talk to a hiring manager. Who is just a person, not an entire organization, and who is not spending that X out of their own pocket.
The hiring manager is a person representing a company, which is exactly why they would find their downplaying the offer (because they were hoping to increase it somewhat to meet the candidate in the middle, so they had to start low because they want to keep some gap there) embarassing and feel insulted.
They may not be spending out of their pocket but they are spending out of their budget.
Interviewee: I want X.
Company: Sorry but that's above our max budget.
Interviewee: What can you offer me?
Company: Y, Y<X that's our max budget.
Interviewee: OK, I can consider it if you promise me a reasonable revision in a year.
2:
Interviewee: Whats your offer?
Company: Z, Z<Y
Interviewee: That's too low. I want X.
Company: You're asking for X when we offered Z. That's too much of a difference and it doesn't sound reasonable to us. We find it insulting. Let's end it here.