As a hiring manager I'd be furious if a grunt from HR took it upon herself to send a candidate packing like that.

I would have just lied about my current salary to prevent them from low balling me. But if you're more of a boy scout than I am, just because they know what your current salary is doesn't mean you have to bend on what your expectations are. If they don't meet your expectations, they don't meet your expectations, so then you walk.