How should I have responded to this?

Frankly, not doing anything is the best response. He said a mean-spirited and selfish thing to you. I doubt he's going to feel bad about it, nor will he change his outlook. You did the right thing by not pursuing it further. Don't bring yourself to his level. Somehow I doubt many other veterans from WWII share his opinions, and most people are thankful for veterans regardless of the outcome of that particular war. Veterans are appreciated for their service and sacrifice, and nothing he says will change that.