SeriouslyFun: I should also add that they will continue to be friends, and possibly continue to visit each other.

HELL NO!!!! Basically what "he" is telling her is that she would not be his first choice for a intimate, long term partner, but because the one he really wants is too far away - he will
settle for her. That would give any woman a warm fuzzy feeling: "you are good enough I guess, for second choice"...
I would be insulted on many different levels....and how would I deal with it? Keep on walking dude.....JMHO