Are you that bothered or interested in him? I can only echo what everyone else has said about his original message but as for how to respond, I'd probably go for something like ok thanks for being honest, it doesn't sound like you have the time to put into dating so I think it's best if we put a pin in things. And leave it there!
I wouldn't be flexible or offer a compromise like "what if we agree to only meet up once every two weeks or when you've got time?", if that makes sense. He's said he's too busy, so that's that. Sometimes I found guys want you to do the leg work when they claimed to be busy, like seeing them when it's convenient/last minute, you travelling to see them, planning dates and the like - anything that means they don't need to put in the work
Personally no, it sounds bad but I've never found myself wanting to be friends with any of these people. Wasn't friends with them to begin with, so wasn't gonna be friends with them after the date! Guys seem to treat the "friendship" as an ego boost or a free therapy session, I did try to be friends with a couple of guys but they never took a genuine interest in my life, it was always about them. I cba with orbiters. You always get ditched as soon as they start dating someone new or get a girlfriend.