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Thermal Conductivity is the pump, and Heat Capacity is the resevoir. The larger the Heat Capacity, the larger the resevoir. The higher the Thermal Conductivity, the faster the pump works.
So in the case of insulating, you want to use a material that has both a high capacity and a low conductivity. A big resevoir, but a slow pump. Between the 2 materials, you'd want to use Sandstone.
As for Granite specifically, it just has a lot of useful properties overall. Other than Abyssalite, it is the strongest Mineral, able to support very large amounts of pressure. It provides a 20% bonus to positive Decor, or reduction to negative Decor, for any item built out of it. And it's relatively abundant once you leave the starting area. So it doesn't sururpse me that someone somewhere made a fuzzy statement that made it sound like Granite was good for insulation.