As Alex correctly noted, the story is about a submarine, not a steamboat (your source is just wrong).
The story is discussed in detail in the Wikipedia article Nautilus.
Here are the key paragraphs:
Through friends like Gaspard Monge and Pierre-Simon Laplace, Fulton obtained an interview with Napoleon, but was unable to garner support for his vessel; however, Fulton's friends pushed the Minister of Marine into appointing a scholarly panel, to consist of Volney, Monge, and Laplace, to assess the submarine.
So, Fulton was taken seriously.
In September, Napoleon expressed interest in seeing Nautilus, only to find that, as it had leaked badly, Fulton had her dismantled and the more important bits destroyed at the end of the tests. Despite the many reports of success by reliable witnesses, like the Prefect Marine of Brest, Napoleon decided Fulton was a swindler and charlatan. The French navy had no enthusiasm for a weapon they considered suicidal for the crews even though Fulton had had no problems(*) and despite evidence it would be overwhelmingly destructive against conventional ships.
(*) I think, Wikipedia article is too kind to Fulton here: It's clear from the above that Fulton had some pretty serious reliability issues with his design.
My take is that Fulton (and his design) failed at the worst possible time and that Napoleon decided to believe his eyes rather than arguments from his experts and subordinates (who disagreed among each other). What were his exact words, I do not know, my suggestion is to check the references given by the Wikipedia article:
Robert Forrest Burgess. "Ships Beneath the Sea." McGraw-Hill. (1975)
William Barclay Parsons. "Robert Fulton and the submarine." Columbia University Press. (1922)