I would be very skeptical of a music teacher who discourages a student from "learning by ear." Certainly there should be room for as broad and deep an awareness of music as the student can possibly develop, at every stage of a musical education.

Without knowing the person or circumstances, I would hazard a guess that job-security might be an issue here, and the teacher's own interests may be promoted at the expense of the student's. Perhaps that's a bit harsh, and even if it's true it may be unconscious and inintentional, but it's something to consider...