That is not an unusual nor an unreasonable request...so long as it really wasn't a "demand" but a request. The two roles of submitting and reviewing are separate and editors need professionals to review manuscripts. Consequently, if we think that someone has the ability to review -- albeit their most recent manuscript was rejected -- then we will ask them to do so...it really is a professional responsibility that we all should accept when possible. After all, peer review is one of the essentials of good research and its credibility.
Regarding your rejected manuscript, don't be discouraged. You have gotten some feedback (beneficial to improving the manuscript hopefully)and you can modify your paper and submit somewhere else....rejection and re-writes are simply a part of the process....the first manuscript I submitted....back in the early 1980s was accepted without revision. I thought, "man, this publishing gig is easy"...after over 100+ publications...that is the ONLY manuscript that did not require rewrites or re-submitting....Hang in there and keep trying!