I think in essence, both of you may be right, but for different reasons.
Those old guys I knew growing up in another era, were products of thier own environment. They used what was available in thier time. The pen knife of old was carried by a heck of a lot of people who were not knife knuts like us. When you get right down to it, I wonder how many of X production knives a year go to repeat buyers who already have several knives? But there is always a segment of people who bought a small pen knife, (now and in the old days) who on some level realized a sharp cutting tool is a nice thing to have sometimes, and once in a while can even be a dire needed tool. But they were not into knives, so they wanted one that was no bother untill needed. One that they could drop in a pocket and forget about untill needed.
Back then, those non knife nuts bought a small pen knife, or even one of those tiny keychain knives. Usually a very small two blade jack with celuloid or bone handles. And for most light duty cutting, they did just fine. They were even given away by feed companies and auto parts stores. They had thin carbon steel blades that actually got very sharp and cut well.
That was then, this is now. Fast forward the way back machine from 1949 to 2009, and you have a whole different person buying. There's still the city office worker or suburbanite commuter that recognizes a need for a small sharp cutting tool that he can forget about till needed. But now we have a buyer who didn't grow up in an era where stainless steel was a bad thing, and plastic reserved only for cheap toys. My father was a very good example of the past generation. He had a dim opinion of stainless steel from the stuff that was made for table wear in the 1930's, and the stuff from the 40's. In his day, even low cost knives had bone handles of sawn bone and natural finish. Plastic was not in the game then.
My generation grew up with some of the first nice stainless coming down the pike. High impact plastics became the norm for durability. When I came home with my first sak, dad looked at it, and made a hurmph noise, and pronounced that it would probably fall apart in a few months. Ten years later that little Victorinox tinker was still going strong, had stood up for a lot of hard use on three contenents. Then there was the Buck revolution. That one company changed a lot of things. A lot of old timers ended up with a stainless steel Buck knife, and liked it.
With modern high speed cutting edge machines, Victorinox makes over 35 million knives a year. Those are 20 different types for world wide distribution. Of those, a bit over 9 million classics are made. Every year. Those production numbers exceed any numbers from Camillus, Schrade, or any other knife company. That's a heck of a lot of knives. In particular, that's a heck of a lot of classics.
Not too long ago, one of the knife magazines had a cover photo of a Vic classic and had it billed as the most confiscated knife at airports. I know just from my own experiance, I see the little red things on keychains all over the place. Granted, I live in a pretty yuppyfied area, the Maryland suburbs of Washington D.C., seat of national insanity. But if you shake down 50 people around here, your gonna find several classics in purses, on keychains.
I think there's still a large segment of non knife knut population that recognizes they need a small sharp cutting tool. They're not like us. They want the same thing as my dad's generation did; a small not too expensive knife that is small enough to forget about till needed. Walk into a store, and the little classic is what you'll find in Target, Walmart, Dick's, and a lot of other stores. The sak became well known in the 60's and 70's. Heck, they even had a TV show with the hero doing the impossable with a sak. The little red knife with the silver cross on it became an icon for a generation. Right up there with Coca Cola and Bic pens.
Now when they, the non knife knut who does not share our fetish for knives, goes looking for a small economicly priced pen knife size thing to put on a keychain, the red handle is recognized immediatly. The sak has become the modern penknife. If a sak classic is not bought, I see a lot of people carring one of those keychain size Leathermans. A juice of something like that name. Tiny knife blade, pliers and some other tools.
I guess there's a lot of evidence to site for the keychain sak being the 'pen knife' of the early 21st century. With Schrade and Camillus gone, as well as most of the other big old time names, there's no real competition for the job.
For those old guys I grew up around, a 'pen knife' is allways going to be a slim two blade pocket knife with carbon steel blades, and looks that any grandfather would recognize. But for the modern 30 something city office guy, the red handles are what's going to be bought. Different generations will recognize different icons. Heck, Macgyver lives!
I once did an experiment with the little classic some years ago. The company that my Karen worked for bought some with their logo on it and handed them out to customers. Of course as hear of customer relations, Karen had one on her kkeychain. Up till then, I thought the classic as some sort of joke. At the time my edc was a large sodbuster.
But as the months passed, and I watched with horror as Karen did what a typical woman and non knife knut did which was abuse the tiny classic by hard use, I expected it to cave. I was wrong. After some months, I put one on my own keyring, and made it a point to use the classic first, before going for my more manly edc. To my great, great, surprise, the little classic did 98% of what I had to do. This of course started my quest to downaize to my fathers finse carry; the peanut. The classic made me understand how dad did what he did.
I think the little classic can be called the pen knife of the modern age.
Even though it would never pass muster by the liers circle.
On the other hand, what would be the 'pen knife' of a Victorian era gentleman in London? Smiling-knife has some exuisite pearl lobster pens of the heyday of Sheffield, with little sissors and nail files, and pipe reamers, and even some knife blades in there among them.
So it all comes down to when and where. Hail Britannia!