It's not an argument, it's math and physiology. All else being equal, a person with a 50" 1080p display at 8' can't tell the difference between 1080p and 720p content. The eyes just can't pick up the 1080p detail at that display size and distance. You need to sit much closer or get a much bigger display.
IOW, he may not even realize his player isn't capable of 1080p because he can't see the difference.
At 50”, which is the lowest of the hdtv 1080p realm, you might be right.
However, as sizes go up, you can CLEARLY tell the difference.
Can you tell the difference between a 2 megapixel camera and a .5 megapixel one on a 14” display?
It’s about the same here. My 50+ year old mom keeps going on how much better my 1080P display looks than their 720P one.