I do agree with the idea behind the argument. Fantasy settings, by their very nature, tend to contain a number of elements that do not exist in the real world. For example, people cannot use magic in the real world or fight dragons while riding on the backs of pegasi. Since these elements do not exist in the real world, they can never be truly "realistic."
However, just because a fantasy setting contains unrealistic elements doesn't mean it can't have a internal sense of logic and verisimilitude. Yes, you can have a world filled to the brim with unrealistic elements with no real explanation about how those elements work in your world. However, doing so will most likely push most people's ability to suspend their disbelief too far. Every setting, especially ones with fantastical elements, needs to be at least believable and have a sense of logic so people will be more willing to buy into it.
For example, lets say you are designing a fictional world and you want magic to exist on this world. While you could say, "Magic exists and it works because I say so," that would be lazy world-building. Instead, you decide people perform magical spells by focusing their inner energy through arcane rituals to warp reality around them. The bigger the change, the more complex the ritual will be. Since you've set up the rules for how magic works, people will be more willing to except it because you've given them an explanation that makes sense to them.
So, while fantasy settings can possess unrealistic elements, they still need to make sense within the world that you are presenting. If your setting has the same physical laws that our world does (and most seem to), you have to make sure the things you present conform to those laws or have a logical and understandable reason for why an element breaks those laws. I think that's an easy enough thing to remember, don't you?