My $0.02 worth. The pilot was unprofessional and his behavior should not be condoned. It was good that he was reported. The pilot should have merely alerted you to the fact that your conversation was loud enough to bother him and asked nicely for the conversation to be toned down.

That said, it was clear that the OP's conversation was bothering someone in the cabin yet they continued the conversation at the same loudness. What was the thought there? They were entitled to have conversations at night even though it was bothering others? Where's the consideration for others? What would the OP have done if the pilot asked nicely? Responded "Sorry, we have the right to keep others from sleeping"?