Yes, Vittal explains exactly what is wrong with the "solution" above. It's a great example of 'circular reasoning'. They assume the answer to the question is 'yes', and then prove the answer is 'yes'. Of course, that shouldn't come as a surprise!
Analyzing Statement 2 correctly, if x = s+2, then the right side of the equation in the question becomes r(s+2) - 2 = rs + 2r - 2. That will only be equal to rs if 2r - 2 = 0, or if r = 1. Since we don't know if r = 1, we can't be certain of the answer to the question, and the statement is insufficient. Combining Statements 1 and 2, it's still possible that r is 1, or that r is not 1, so the answer is E.
Out of curiosity, where is the question and 'solution' from?
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