The response actually happened. It derived from the initial response that Brigadier General Anthiny MacAuliffe had when informed that the Nazis had demanded that he surrender. When he considered providing a more formal response, his staff said that they preferred his initial response. One gets the sense that the unconventional response came from a combination of fatigus and determination on the part of the Americans. It also enhanced their espirit in the battle. The term "nuts" as a negative response to a question or demand would have been very familiar to the Americans at the time.