Gary Gygax would like to disagree with you.
He may, but the quote you cited is largely orthogonal to the issue Balesir raised.
Gygax is talking about fidelity to the spirit being superior to fidelity to the letter. No one with half a brain argues against that (though there are plenty of people on the internet demonstrating how it goes).
Balesir is discussing what are good solutions when the spirit and letter are in conflict, not whether they ever are. Gygax's solution is fine as a stop gap. You are running some game, and something comes up that is obviously in conflict with the spirit of the game. So you make a ruling. But outside that environment, and certainly once you talk about reasonable game design, it's a lousy option. If you've got a rule that is that much in conflict with the spirit, change the rule so that DMs will not need to fix it!
Part of the presentation problem with 4E is that very distinction. All that syrupy crap about saying yes all the time, with no discussions of the edge cases, is exactly against the spirit of what 4E is trying to do elsewhere in the ruleset. The whole idea of flexible, narrative mechanics is that you roll with it when it makes sense, establish what makes sense as it happens, and then build from there. (You might do a "reset" for a new campaign or such, but you'd have some consistency.)
That is, if someone otherwise happy running 4E who doesn't want the players to have any kind of narrative control, then said DM should ban CAGI and/or house rule it to work some other way. They should not allow it under some mistaken fidelity to the letter of 4E making power choice a player decision, but then effectively neuter that decision by arbitrarily imposing their vision of the power. If the spirit of the rules is important enough here to rule on, it's important enough to either ban the power or state the conditions that make it acceptable.
You'd think DMs, of all people, would be comfortable with the idea of wearing different hats. But a lot of the "criticism" of systems from people strikes me very much as credentialed dude insisting that the system recognizing a particular hat on his head at all times, as if he were the Doctor DM running a hospital, and everyone else staff, but then acted that way when at home, on a fishing trip with buddies, etc.