Your instructor needs to think outside the square a bit more. A go-around from minima during an instrument approach is usually performed at high power (depends on type whether it is full power or a slightly lower value). From greater altitudes, it really depends on what you need to get the job done safely. Ditto with re-configuring gear and flaps etc. From the minima it is usual to retract them (in case of engine failure and to ensure terrain clearance). If at or above circling minima, and VISUAL, the circling configuration can be maintained while you re-position for another go.
Why flog the engines if you don't have to? While it may be OK to run them full bore for hours on end, the sudden temperature changes going from near idle power to full throttle in a few seconds can't be good for them in the long term.