The person you are talking to is not Mr. Pokemon most likely.
You could have easily confused him for the Apricorn man, who is found in the first house you see on the route.
Mr. Pokemon will always trade you for the Red Scale, no matter whether you beat the Elite Four or not.
If you talk to him after having received your Kanto Starter from Oak, he will instead give you the Blue Orb. Until you have captured Kyogre (Embedded Tower) he should give you this dialogue:
>"That Orb has something to do with the ancient ruins located past Cianwood City, called the Embedded Tower. But only a handful of Trainers can reach there... That's where you come in. Professor Oak thinks highly of you, and you are the proud Champion after all. I'm sure you can solve the mystery of the Orb and the secret of the ruins."
>"The Embedded Tower is past Cianwood, somewhere in the Cliff Cave. Or so I heard. Or so I remember. Or so I believe!"
After this task is over he talks about the Kimono Girls (repetitive dialogue that experiences no further change).
He does not even mention the Red Scale anymore, so unless you haven't received you Kanto Starter, this should be the most likely case.
Source: A playthrough and test run.
Hope I helped!