I think the cop was in his right to stop you. In fact, I hope that happens a little bit around our town with the sidewalk riders for their own good. I do not want any cyclist to be ticketed but I do want them to be informed. Some know the law/safest approaches and decide to do other things, which is not uncommon. Others do not know and if stopped, need to be informed.
The thing that bothered me most about your conversation was when he discussed the way streets are paid for ... "the people of this town don't feel safe on the roads they built with their taxpayer dollars because of cyclists that don't obey the law." It could be one two things. First is that you are from SF and did not pay for the roads. So, you have a higher obligation to obey the law. That seems silly. I expect he does not really know how roads are funded and believes they are paid by gas tax. He was suggesting to you that you are borrowing road space that you do not pay for. Consequently, you should behave as a guest. Your best behavior.
It is a BS argument made by many. In fact, if you pay any taxes state/federal, your dollars can be found in the cement you were riding on.