Purchase Point Design interview questions

I located this job listing online and sent in my resume. I was contacted via email by the company owner, who requested a phone interview. The company is a virtual company that has about 12 employees. Everyone works out of their homes. They design point of purchase displays but don't manufacture anything. They also use some kind of research protocol to determine point of purchase display effectiveness, invented by the owner, called POPtomizer. The work would've involved working from home on different 3D renderings of point of purchase displays. The owner mentioned that although the employees are full time salaried employees, they generally use their own computers and software, although he said he might be able to "help out" if an employee needed some specific software for work. He stated that 50 hour work weeks were common although time off was flexible. He also mentioned that all potential employees were required to complete non paid spec work "test project" to determine ability level, regardless of the designer's experience level or portfolio. He claimed that this work would not be used by the company, but his design director insisted that test projects be sent with no watermark. Several portfolio samples in the online company portfolio matched the description of the two requested test projects. We did not speak about 401K or health benefits. The interview went well until he asked about salary range. I told him what I needed (a reasonable range for someone with my level of experience) and the interview screeched to a halt. He became somewhat curt, thanked me for my time, and hung up the phone. I was notified via email the next week that I was no longer being considered for the job. The impression I got from the interview is that he wanted senior level design ability but didn't want to/couldn't spend for it. At 50 hours a week, even working from home, this would not be a good deal for most people. He never mentioned the salary range he had in mind though. He was unwilling to hire anyone on a per project freelance basis, as he it did not match his business model. The owner seemed nice enough, and perhaps this job would be a good match for someone, but I felt like there were too many unanswered questions, and I had concerns about the long term viability of a small company. I was unwilling to take a huge career leap and accept a job from someone I've never met face to face. I also had major issues with the owner requiring spec work for free before being considered for the job, and the prospect of buying my own software and machines for full time work was not appealing. However, this kind of work could be ideal for someone who wants to work from home.