It's something we've possibly all pondered at one point or another. I know I'm in no danger of doing a 30 min 10k, or a 2'30 marathon any time soon. But that doesn't mean I should stop running. I challenge myself, I want to get this time for a 10k, or I want to run this far, or have the experience of completing this event... I hope to do an IM one day, but not yet. For me, my mara time is within those limits, but I'm not a strong cyclist, and although I like swimming I don't have much endurance and I'm not very fast, so I imagine overall I'd not be anywhere near the front of an IM. 
To me one of the exciting things with running (and this may be true in the tri world, esp at IM distance) is that I can enter a race alongside the world's greats. If you do one of the bigger marathons, Paula, or Haile, or whoever might be there at the front... If someone has done a 5 hr marathon, or a 16hr IM, or even a 1'15 10k, they have the achievement of having *done* it all, which is surely better than not doing it. Whether they should make themselves try to get faster is up to them. For some the challenge is to push a 10k time under an hour, or under 45 mins, for some it's to run further than they have before. Personally, although I enjoy a bit of speed work, I don't really like short races enough to focus on, say, getting a great 5k time before running further. If it was my job, then perhaps I would, but if it's for fun then your goals and your achievements are what you decide them to be.
I suppose it's down to how you take the original statement. If he means compete rather than complete, then fine. But if he's just mistaken with figures then that's less heinous than saying slower peeps shouldn't enter at all... But I think we're all sort of saying the same thing, in that what it's 'worth' you doing depends on what you want, so if you only want to enter if you can compete at that distance then fine, but if your goal is to enjoy/complete then fine. I hope the competers don't preclude the completers!