A totally different situation and a very flawed analogy. Medical rules are well laid down and if the AME didn't think you were fit enough to meet the standards, then they would be right to refuse you and refer you elsewhere to be reassessed formally.
They would be using their professional discretion. An FI refusing to sign your logbook because you are a blatant danger to yourself and others is doing the same thing.
As the rules are so open to interpretation, then I see absolutely nothing wrong with doing what I see as "best practise." If the law was written properly and said exactly what it meant, then I would follow it, but as it isn't, we have to muddle by the best way we can and do our utmost to keep our customers safe. If that means going beyond the letter of the law. So be it. You as a member sign the flying order book and if you don't accept it, then join another club.
If you don't measure up, then you have to be pretty shonky and why would you want to share airspace with people who are quite frankly a menace?
I don't and this is a very, very rare occurance fortunately as most people are either pretty good, or realise what their limitations are and are open to doing things properly.