Keep in mind the old guy or his neighbors may have had things happen in the alley that piqued his curiosity. Crap is happening out there. I had some swine visit my back yard this September and they ran off with half my drying laundry. You can bet I give unfamiliar passers by the eye now, at least to see if I recognize my clothes.
Even if the guy was less than graceful about the confrontation (it doesn't come easy for normally reserved people), maybe think about being friendly and starting a conversation next time. Instead of rehearsing how to protect the ego. Turn it into something better. Always works better in the long run, even if it takes a couple tries. (he'll go home thinking "hmmmm") Your dog might even have a little less "pinch anxiety".