Well was it marked as a bike lane, or did you just see a piece of pavement to the right??? Most places if its marked as a bike lane, they should be in it. Yet most of the time its a shoulder to the road, and though I almost always use them its not a legal requirement in most places. Some shoulders are barely able to be used for the emergency parking for which they are intended. Shoulders can be loaded with lots of things that are a real hazard to a cyclist. Loose gravel, lots of broken glass, pot holes that don't get fixed nearly as often because its not a travel lane, and all manner of road debris can put a cyclist on the ground before they have a chance to do anything. I have been a few places where the road was safer. They have every right to a lane, and the ENTIRE lane if they want or need it. At times its most definitely needed. Turning left I often take the entire lane at a light. The car knows what I am doing, there is no confusion and the extra 10 seconds for me to complete the turn holds no one up.
Why do they ride 2 feet from the curb? For the most part its safer. IF you are right next to the curb, the temptation for the driver is to try to pass and stay totally in their lane with traffic on coming. The end result is the cyclists handle bar can get bumped and they go down, often getting tangled up with the car and the cyclist loses. You might have taken it as being a jerk, but when no bike lane is around (and shoulders do not count) he might have been riding smart. Without a shoulder or bike lane, and especially with a narrow travel lane he WAS riding smart.
Moving over toward the center forces the driver to have to move over to pass. If they have to wait for on coming traffic to clear anyway, they can give you more room when they pass you instead of putting the old squeeze play on you. IF you pass them on the shoulder to the cyclist right, it will be you not the cyclist that gets a ticket. How many people pass a car on the autobahn on the right??? If you pass him in the bike lane, you both might get one.
Confrontational is not the word I would use, but we Americans do tend to be competitive and stand our ground. I believe that the main reason the country grew as fast and developed as much as it did so fast is that someone told them it couldn't be done. To prove them wrong they found a better way to do it. There are also just a few jerks, but my experience its very rare.