Well, if it adds flavor and some meaningful differences between the civs, I'm willing to overlook a little lack of realism. Besides, he has a point: Consider the Arctic, the Arabian desert, the Amazon basin, the Serengeti, and the Himalayas. All are populated, and have been for millennia. But translocate a group from any one of those locations to any of the others, and they'll all be dead within days.
With that said, cross-biome wars and trading caravans are still possibilities: Just ask the Vikings, Chinese, Romans, and Arabs. It's a nice place to visit/trade/plunder, but you don't have to live there.
True, some "in-your-native-biome-only" rules would be absolutely crippling, like a human civ that happened to land on a Mountain, which means no trees. Ever. And they probably can't get stone, either, so sucks to be them. I wouldn't take the rule THAT far. But since the "flavor" of each civ would only show up in what the caravans brought, I see no reason why the plants, animals, and garments they have for sale shouldn't reflect a certain culture & lifestyle. This "culture shock" would be especially noticeable if one's fort could be visited by multiple civs of a given race, which is another change that I'd like to see.