Well, I'm with the teacher on one point: for practice, an electric guitar needs only needs to be loud enough to hear it. No louder than an acoustic anyway. I once had lessons - in a group of 4 students - with the great jazz player John Etheridge; he didn't allow us (all electric players) to use amps at all! The lessons worked fine.
As for the rest of it - I think I'm with the student (even if he's reporting through a red mist....
).