To make Red Ibis admit that this is indeed stupid is almost impossible.
Either he is truly insane and thinks it's a valid theory, or is just dumb and can't tell his ass from his elbow and just can't understand how the real world works (both of which I doubt very much, Red isn't crazy nor a cretin), or he is entirely conscious of how stupid Bill's theory is but cannot bring himself to admit it, because the alternative would be that the Official Story is alot more plausible, which is to him an unacceptable position.
So by his refusal to answer he shows how far an intelligent man is willing to go to accept pretty much anything except admit the truth.