If he only needs to pay 800 to win 1150, then based on pot odds, he was clearly correct to call. He's only about 5 to 4 dog. Non-dominated connectors do pretty well against an overcard/undercard combo heads up. What suit the cards are (do you share any suits for 1-card flush possibilities) can change things a percent or two, but regardless he had "odds to call. But he's only about +EV by 3% or so - he only needs to win about 41% of the time (800/1950) to be neutral EV, he wins about 44% of the time (roughly).
http://www.twodimes.net/poker/?g=h&b...+Td%0D%0AKc+7s
Doesn't mean it's the right play when factoring in other "meta-tournament" factors, but strictly based on pot odds, it was. Based on your postion and short stack, he was probably right to suspect that you were pushing some crappy/semi-crappy hand, but I still don't think it's a good play for him, since he could be dominated by semi-crap/lose a chunk of his huge chip gap that he could use to start really pushing people around with.