I kinda felt sorry for Steve when the crowd walked out on him and he's just left standing there, and he's like what da fbomb? It was kind of cute and a good use of 2Cellos played by all-American kids...
It was obvious schtick, and I bet Vai was behind the whole thing, making fun of his fame, and pretending to be egotistical, and then insulted. Vai is a great player no matter what we think of his image. I bet he had his own sound guy there to do the probably programmed drums and whatever other recorded tracks were involved.
My advice is don't believe anything you see on You Tube as factual, much of it is scripted. And that one was obviously (to me) scripted. Plus the recording was done on pro gear (probably Pro Tools HD sounds like to me), probably not in GC at the time. Schtick amigos. But it was fun to watch, and fun to see Vai has a little sense of humor of himself and his fame.