I had a theory but I never asked Steve about it so I’m not sure.
My theory is that the best people tend to be pretty self-assured and therefore less sensitive. He used the same weeding out process that, say, the Navy Seals use. Your sergeant is not going to give you hugs when you show up for basic training. If you had enough confidence that you could cut the mustard, then your sergeant screaming that you’re weak like a little girl didn’t bother you because you knew it wasn’t true. And if it did bother you, you probably shouldn’t be a Seal.
For example, Jon Rubinstein and Phil Schiller decided to hire windows programmers to create a Windows version of iTunes. They did it in secret because Steve would have said no. When Steve found out, he screamed at Jon in a hallway: fuck you! You’re going to wreck the company and it will be on you. Didn’t matter, Rubie was right (I worked closely with him at NeXT) and Apple did okay.
The success of Steve’s approach is he retained people with confidence and conviction, enough to know the iPod would not succeed if it wasn’t Windows compatible.