Dress code differs from one area to another and can be tricky. that area in particular is inhabited by most conservative locals. You should have argued back and threaten to contact officials as long shorts are not forbidden , unless you were wearing a tank top ;)
Expect more locals those days to comment on dress code, after pictures of westerners in bikinis sunbathing at the corniche is widely circulated through social networks, Blackberry & internet forums which offended many.
Still they have no right to do so without official notice. Thus, you're entitled to wear what you like as long as it's modest