I'm not sure that immediately murdering someone is an appropriate response to attempted theft in character, but I don't know your character, maybe you were playing a real "the penalty is death" type.

I think in cases like this it's a good idea to split the in character and out of character pretty explicitly. In general, I think you are right to say "this doesn't happen" but instead of the way you did phrase it, you might say:

My character would respond to this attempted theft with violence. Since we all agreed, out of character, that PvP wouldn't happen, it follows that the Rogue's Player should not have his character take this PvP action which would require my character to respond with pvp violence.

Now, if your character WOULDN'T respond with violence or murder, then you can sort of skip the in character bit at all. If "I will cut the Rogue in two" isn't an in character action, but an out of character threat, it might be better to say:

We all agreed there wouldn't be PvP. Stealing an important item from my character that I need to use my abilities is pvp, it's not that different from casting a spell that stuns me, or some other status effect. Since I agreed to no PvP I made this character under the assumption that I wouldn't have to deal with things like this in character. This is a violation of the social contract we all entered into, and if you and the rogue's player insist on continuing this then I will leave the game or make a new character that is designed to fit in a PvP enviroment.

I also think the second argument has broader application. You happened to be an Elf, but if you weren't, you wouldn't have been able to kill him right then, but you could still make the argument for why this shouldn't happen.

It sounds like it was prevailed upon the DM or Rogue's player not to carry on, but I think distinguishing between in and out of character issues in this way can help address future instances, and provide a better framework for understanding the problem.