"he can play anything in any key anywhere up the fretboard to the last fret" - only, as you correctly say, actually he can't - unless he has six fingers on his left hand. I guess you could manage some open tuning shapes over a permanent barre, for example, but the drone strings would never ring the way they are intended to do without a fixed capo.

I trained in classical guitar and frequently use the teenage frets - but I only do a handful of songs without a capo - and that's solo where I have the freedom to choose. If you play with another instrument that has it's own range issues - specially any tune-leading sonophone like fiddle or banjo, or most squeezeboxes - where cross fingering is crucial to the sound feel, you'd be a fool not to embrace the capo.

Tom