I think that kind of approach was not unusual back in those days, probably because many Oriental teachers had no intention of teaching Westerners and also because many of them believed that Occidentals couldn't really learn or understand the martial arts.
In some cases it had something to do with testing the prospective student's resolve but in my case, I think it was just taken for granted (by my sifu's wife) that foreigners weren't to be taught kung-fu. It just wasn't done (or even considered) forty years ago.