Shawn-
I have heard that argument, and variations of it, many times. It is a shame when otherwise sincere environmentalists become infected with phoney science and anthropomorphic crap. Bad science makes poor environmentalism. I have even been surprised to see the fly-fishing press rise to bait by saying that we have to be careful not to overemphasize catch-and-release, and that we have to emphasize our option to kill and eat fish or we will lose all justification for our sport! Nonsense.
I have no problem with those who want to kill and eat fish as long as it is done in a way that respects the resource and doesn't break the law; but I'm not about to start killing fish just to respond to the assault from that misguided organization.
I will admit that--like anything--catch-and-release can have its dark side. When fish are routinely mishandled or when greedy fishing pressure amounts to harrassment the ethic is being abused; but don't buy the argument that some high degree of mysterious "hooking mortality" results from properly practiced fly fishing. When fish are efficiently fought and carefully released, the incidence of this is practically nil (provided that you refrain from catching fish when high water temperatures have them prestressed from lack of oxygen).
I will also grant that when we are so dogmatic about releasing fish that we continue to do it to the detriment of threatened native species (like releasing alien brook trout in native bull trout waters, rainbows in greenback cutthroat waters, or smallmouth bass in threatened brook trout streams) we do no service to the species or the resource.
That said, I can certainly understand your bewilderment when your colleague asserted more sympathy with killing fish than injuring them. Oddly, this is where I agree. I, too, have little sympathy for "sports" who truly injure fish for pleasure. But, you need to get your colleague to define "injure." The gist of this misguided argument is that we cause "pain" through the act of (even proper) catch-and-release. Personally, I have no wish to impose pain and suffering on fish, and if I thought that's what I was doing, I'd quit. But pain, as we know it, and the suffering that accompanies it are sensations and emotions of higher animals with more highly developed brains (sometimes, but not always, including humans).
A few years back, Fly Fisherman ran a good article on the science behind the perception of "pain" in fish (I can't remember the exact issue, but perhaps someone else can help). Anyway, you really don't need the article to "justify" things. Your own experience as a fly fisher should reveal the truth. Fish fight the line and pressure from it in a noble effort to escape restraint, not because of pain they are suffering. You have only to observe their response when that pressure is released to recognize this--if the hook were causing pain they would surely continue to struggle. Consider all of the salmon and steelhead swimming in the Salmon River (NY) with hooks of every configuration festooning every part of their bodies (this situation has improved somewhat)--do they behave as though in pain? At most, even this sad abuse is a minor irritant to the fish. Occasionally, you may see a fish attempt to rub a hook against a rock to remove the annoyance, but most behave like any other (undecorated) fish.
In my experience, fish are perfectly willing to cause injury to themselves that far exceeds any that I would willingly cause. I have seen trout rub their noses raw and bloody grubbing for caddis larvae. I have watched rainbows and dollies deliberately endure savage, flesh-rending attacks from spawning salmon just to steal a few eggs--and then eagerly go back for more. And consider what the salmon themselves blithely endure just to spawn. I dare say that if sex was that violent and deadly for our wimpy species we'd have gone extinct long before we ever learned to fly fish!
And finally, I will say that I don't particularly like the heavy mouth-scarring, maxillary-flap-ripping, and outright blinding of beautiful fish that so often results from the current bead-fishing practice in Alaska (and, yes, I do understand the argument that it prevents gluttonous fish from being deeply hooked). But I will also readily confess that this is primarily an aesthetic objection. The fish seem to deal with it far better than I do.
Sorry Shawn, I know this is a rant--but I couldn't resist. I thought I had learned when to keep my mouth shut, but I guess I'll just have to learn that lesson all over again. Damn.