I think his point is that this would be his target machine if they gave you the option to upgrade to a better card. What's wrong with giving a person the option?
I'm all for options. The Mac Pro is your option in this case (and it can be had, in its base configuration, for not a whole lot more than the iMac), or even the 24" iMac, which has a better card. Apple has NEVER been about making endlessly customizable systems, particularly in the mid-range. Providing this type of choice would be nice for us, but would produce tremendous overhead costs for Apple. A more user-serviceable design would be nice, though, so we could change the card later.
I'm not justifying or agreeing with their stance on this, just stating facts.
I've also stated that for moderate gaming, the X1600 has served me well. COD2 and all the EA Sports games (under Windows for the latter) look very nice, even on mid-high settings. I don't think you'll suffer too badly with the X1600, and if you are, then move to the 24" or the MacPro, or simply buy a dedicated gaming machine.
Computers can't be all things to all people, all of the time. Well, they can, but not for a reasonable price.