I use much more the google webmaster tools (HTML suggestions, crawl stats, sitemap ratio of indexed pages, links section, and queries section) + AwStats (referers, keyword/keyexpressions, amount of visitors) than analytics.
Analytics can be extremely powerful on some aspects though :
- the conversion tool is fantastic if your site suits
- analisys by keyword
- siteseach stats
...
I would definitely not ban it.
When he speaks about monitoring "bot spiders", I agree it helps but there are some many things to be done before that when it comes to SEO ...
What do you think ?