No Dwane, his transition was correct.
KPIT’s elevation is 1,204 ft. His airspace is then 5,000 ft AAL = from 1,204 ft MSL – 6,204 MSL.
Since jet aircraft pattern at 1,500ft AAL (2,704ft MSL), the transition airspace should be anywhere between 1,500 ft AAL – 5,000 ft AAL (2,704 ft MSL – 6,204 ft MSL). And he told you to be at 3,500 ft MSL and it is in the transition space. He could’ve even said 3,000 ft and would still be correct; however, it would be too low as there wouldn’t be too much of a space between the jets in the pattern and the one requesting transition.
If you’re still confused, have a look at this thread ;) Assigning a Transition Altitude