Again markus beat me to it. The undo was *not* about changing which card to name for Rebuild to skip, or even to play something else.
Rebuild had started, found the Duchy as the next card and trashed it, then asked IanP which card to gain. This is what the undo was about, he wrongly choose to gain the Estate, most probably because everything happened so fast that he still thought this click was about selecting which card to skip.
This highlights an UI problem with undos: It may not be totally clear to the players who have to grant/deny it to which point in time an undo request is supposed to rewind the game.
About the players's reactions:
It was (as always) blamelewis's right to deny the undo, but the argument of "new information was revealed" doesn't hold, IMO, but this may have been a mistake on his part, as I explained above.
The chat reaction of IanP (if I assume the log protocol from blamelewis is essentially correct, but that can be verified, if necessary) is not OK, using (even mild) insults is not right, even in the heat of the moment. I can understand that he was frustrated, but it *should* have been expressed in a better way.