It's not like it was a situation he was going to try and take advantage of, and on a little reflection he figured they were probably working a scam on him.
Depends when it was but Iceland has always had a very raucous and drunken nightlife. Hookups from bars are not at all uncommon, it’s how I met my wife! A lot of relationships start through serial hookups on nights out. Packed, tiny bars also means you’ll almost certainly have someone offering to buddy up to pee of either gender just to speed things along.
Honestly, they probably weren't. My experience in Iceland around 8 years ago was very similar to that. I actually took a step back because it was too easy, and skeeved me out a bit.