Limits of materials were pushed indeed. Some safety margins for materials were claimed as under 1.0 - i.e., 0.97 - that is, materials were pushed further than their limits. The idea was that since the engine is used once, we can use it in the manner that greatly reduces the life of the engine - and nobody would care, since a stage will be done with in a few short minutes. A lot of things were done quite unconventionally - remember SR-71, for example, or oxygen-rich pre-burners which were considered rather impossible.
NK-33 remains unsurpassed even today by many criteria. Now it includes even the ability to work after 40 years of shelf line - which probably left the trace on engines reliability.
SpaceX did this test with the Merlin engines too. http://www.airspacemag.com/space/is-spacex-changing-the-rock...
The chamber pressure (and therefore Isp) are both dialed back for the sake of reusability. They're stated multiple times that they're not running those engines anywhere near their physical limits.
Gas generator cycle in general doesn't allow reaching effective Isp as high as closed loop cycle. On the other hand, smaller pressure reduces stress and generally considered safer. NK-15 were single use engines, but NK-33 and most other modern engines are all reusable.
That was quite misleading on Elon's side. Engines were manufactured in 1970's (I believe in 1973-1974) after quite an extensive RND program - actualy, remake of similar engines, NK-15, which weren't nearly as good. NK-33 engines were tested as perhaps no others of theirs caliber - with tests like throwing metal chips (nuts?) into pumps, or running uninterrupted for ~4 hours (!) . Technical capabilities are also quite formidable - ok, Merlin-D has better thrust-to-weight, but worse Isp, and that's with the hindsight of ~40 years. Throttleable... relatively modest pressure by today's standards... And they were stored in Volga region, which is firmly Europe.
So, Musk's comment - intentionally or not - painted OSC's decision in less-than-objective color. Well, Elon is known for exagerrating... and sometimes quite grossly. We'll know the scale.