Reading the story, it is inconceivable that Knuth would have said what he said.
If you take a look at the comments. The other person in the room recalled a somewhat softer rebuke. I'm sorry that either are beyond your ability to conceive.
And surely Steve didn't look like a doofus at all
I think someone who says "I've read all your books" to Knuth really didn't know to what he was referring. TAOCPS was at three volumes in 1986 and I doubt Steve Jobs - based on his not-very technical reputation - would have got through them. Not to mention a few books on math, typography as well as the MIX/360 users guide.
Steve Jobs accomplished some great things - with an enormous amount of help from people who actually knew how to do things - but there is absolutely no evidence that he knew anything about coding. So, to me anyway saying you've read all someones work when you clearly have not and could not. Makes you look like a doofus.