Why wouldn't the handbrake get you out of a hairy situation with understeer? It whips out the rear of the car, effectively braking the line of understeer and allowing a controlled drift instead.
Unless the handbrake is on the front wheels, like on most Saab's, there is nothing mysterious about it and I have myself done it many times on winter roads to regain control of the vehicle.
With a front wheel drive you whip out the rear with the handbrake and steer in, ease in by throttle or a combo and with a rear wheel drive all you need to do to break understeer is using the throttle alone to whip out the rear (as a rule of thumb, most four wheel drives will behave much like a rear wheel drive, seeing as most of them have roughly 60/40 power distribution in favor of rear wheels).
On especially slippery roads you can also experience that the wheels lock up as if breaking when you downshift, yielding much the same result as braking hard or using the handbrake and this will also cause either oversteer or understeer depending on the drive type (fwd, rwd or 4wd).
The traction loss as a result of downshifting on slippery surfaces happens almost exclusively with manual shift cars, though, as the relatively big difference in drivetrain speed change allows for a more direct impact on the application of torque on the driving wheels.
I'm sorry, your friend may have worked with cars (he was in high school anyway) but he knows/knew little of how they actually drive and behave. An engineer designing and constructing a rocket propelled craft isn't by default the best choice for a pilot.
I largely agree that the so called console "sims" are pale ones at best but I still maintain that your friend has a lot to learn.
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