I use the word awesome a lot. (erp, now that I think about it, maybe too much!) I think the only reply to a comment like the one you got would have to be to slowly shake your head and just say:
"Dude, so not cool."
and walk away.
Honestly, though, he sounds like a few of the (American) parents of my middle school students, the phrase "I tell my children to wipe it from their vocabulary" indicates that the problem is HIS not YOURS.