Well frankly, if the option is there and he's not defending it I see no reason why you shouldn't. It shouldn't happen often and it should really only happen with the highest-level guys and/or those that have been training with that instructor for a long time (and are thus more likely to be familiar with his game). Grappling's chess and even Garry Kasparov has been beat. I think I get what he's saying though. I suppose depending upon your point of view it could be seen as disrespectful, but if he's a true teacher then both his ego and yours should be able to put it all in perspective.
That said, if you CAN tap your instructor regularly you're probably going to the wrong gym. I wouldn't pay a monthly gym fee, insurance, etc to a guy I can tap with just a few months/years training. I want an instructor with a lineage and pedigree that pretty well guarantees I'm not going to get the drop on him any time soon. If I were training at a gym run by a blue belt or a purple belt that might be a bit different. Brown-belt and above? No way. I tap that guy and I'm probably not staying around long. I'm sure I'll feel differently in ten years or so.