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4 responses total.

I'd do what you did, but think about the concept of offering a high 
price and possible discount rates in the future, since it does seem to 
be the way clients want it.  I wouldn't change my policy on the spot.

I would ask something like, "What quality work do you expect,
and I can do a little less than that?"

Not really.  What I think would really happen is that I'd
say that I don't offer discounts and then afterward I would
be angry that they'd asked me.  Why are they asking for
a discount?  It seems like the attitude behind it is
"Whatever you charge, it's too high," or "You probably
rip off your other customers, so I'd like to cut that
chunk off your rate."

I am a consultant myself and busy enough that I do turn
down work, and if someone, even a friend, wanted me
to work at a discount, I would have to have a good reason.

lie is lie, whatever the techniques..
perhaps i will say these :no pain no gain

I would tell the person that I have a set rate with no discounts. I know what
my work is worth. If the potential client can't handle that, he's obviously
more concerned about cost than quality. I would only get angry if he pushed
for a special deal after I told him that I didn't offer discounts.

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