I agree with most of your points. Double dipping is basically a non-issue for most players, but I strongly dislike the idea of making any npcs invincible, outside of plot reasons as to why someone might be invincible. I am not saying because they are needed for the plot, but actual story justification as to why they would be.
i don't think he was suggesting the method as something that should be done, but pointing out that it was a developer solution in MP games to stop double dipping cause of balance concerns.
In MMOs this is quite common, actually. It's, obviously, hamfisted, but the problem there lied in that the devs are working with too many things at once, with too many players at once to do anything more elegant with the system.
i don't think he was suggesting the method as something that should be done, but pointing out that it was a developer solution in MP games to stop double dipping cause of balance concerns. 
