I'm guessing his story is BS, I've heard it probably a hundred times when people talk about that they play online. It might have happened with $20 on the table, but doubtful $2000.
Either way he would be a complete idiot to play with his entire roll on one table, but that just goes along with the rest of the story.
go, I would never hesitate to get all of my chips in preflop in a cash game with AA. You have around an 85% chance of winning against a completely random hand, and even against KK you are 81% to win. Those are about as good of odds as you're going to get. Even if the villain flipped his cards up, I would call before they hit the table. If you have a hard time making these calls, then you are playing too high of a limit for your bankroll/experience level, drop down.