First - thanks all for the input... that's why I asked. I appreciate it.
A couple of things in response (and no, I don't want to be that guy who posts asking for advice and opinions and then argues with those opinions!!!):
First - this is 11U, not 8U. Not sure why the assumption was made that it was 8U.
Second - a couple of you mentioned that I should have called time to go argue the point. I find this odd. As an umpire, if I make some offhand comment from a medium distance to a coach, and he then calls time to come confront me about it, I see that as a problem. So as a coach, I don't think I should do that. If I, as an umpire, make a comment to a coach from a distance and he replies in a way I don't like, or I feel I need to make my point closer up or at more length - it's MY job to call time and go discuss it with the coach.
And, attached to that - if I, as umpire, am telling the coach something about a rule, and he calls time to come out of the dugout (area) to tell me I don't know the rules, I'm going to have issue with that as well. So ... as coach ... while my experience may tell me that an umpire doesn't know the rules, I'm sure not going to be the guy to call time and come out and tell him ... at least until some ruling of his needs to be protested (like... given the OP, had he actually ruled OBS because of my player's position, it would have been necessary for me to call time and address it).
So, with that said, I find it odd that my umpire brethren would have expected a coach in this situation to call time to address them - when to me the situation is reversed.
But thanks for the feedback. Probably shouldn't have said, "I'll coach, you umpire".
Honestly, I probably should have ignored him and walked away unless he called time to discuss it with me - at which point I'd be making sure his partner joined us if possible.