Face up prohibitions have been around for a long time. There also a similar rule in 406.4(E).
Seems like you could install face up for a soffit or something - just not a countertop or similar.
Back to the OP: I bet the inspector used to be a contractor and was trying to help the sparky shave a buck to compete with the 10 contractors he just inspected before that job -all of whom never GFI protect unless required. I doubt he was trying to make something less safe.