I like to think this wasn't quick thinking on Don's part. This is a comeback he thought of at least a day after Jimmy Barrett said, "I laugh at you. I go home at night and I laugh at you." I like to imagine he was fuming that he didn't get to say something like that, and kept it in his pocket for years until Ginsberg gave him an excuse to use it.
I'm rewatching season 7 now, and I think I like this season more than some people do. I think, after the writers decided Don would stay in New York, they made interesting choices with that. I still wonder, from a writing standpoint, did it have to be this way?
I think it tells us interesting things about Don's character that he doesn't move to LA with Megan, that despite always trying to run away from everything, he can't leave a place he's being pushed out of. The show does a good job convincing me that it's in character. But part of me feels like he also stays in New York just because it would have changed the show too much. They couldn't have written a season of Mad Men where Don lives across the country and works at a different agency with a bunch of people we don't know, or worse, does something else. That's the one aspect that, to me, cheapens the decision they make.
If Don did go to LA after the end of season 6, he'd clearly see that as a defeat rather than the kind of fresh start he's always running toward but will never find. He'd be miserable there, too. But that also means there would be plenty of conflict if they went there. Part of me wishes they had gone in that direction, even though I love the show as it is, just because it feels like the riskier option. I think they made "Don stays in New York" interesting, but it feels less interesting than it could be if the reason he stays is partly that he couldn't leave New York and still be at the center of this show.