This incident did happen and I was there. To be clear - I think the idea is barking for all the reasons stated; would you trust Int/would it make a difference being uppermost in my mind. However, I think you will find that the AOC was deliberately floating a controversial idea to spark a debate - he seems to have been successful!
The full context was to stimulate thought on the changed nature of the demands upon AD vs Muds - I suspect, for example, that we would all consider flying into a rogue airliner though I'll warrant we would all hope for a survivable collision, even if we knew we were probably deluding ourselves.
He can certainly have the odd Melchett moment but he is also the most dynamic AOC that I have seen for along time, with a clear vision of where he wants to take a Service that he clearly wants the best for. I'd rather have a leader like this than a timid man whose primary interest is the next promotion and a consequent fear of ever putting his head above the parapet.