It sounded as if he wanted to get as close as possible. If that meant a mirror finish off of the mill great, but if it just meant less tooling marks to polish out that would be good too. Yes, the shearhog will leave some lines, but they can be buffed out with a small buffer quickly. I assume that the investment in diamond inserts and a holder is going to be much higher. He also said his machine wasn't the most rigid. It would make him pretty unhappy to buy expensive cutter and find out his machine wasn't as capable as the cutter. At least if he buys a shearhog he can rough out some serious material, leave the best finish his machine is likely capable of, and not spend a fortune. Just my .02.
You have a valid argument with regards to what he'd like to attain, given the equipment he possesses. Although, no special tool holder needs to be purchased in order to utilize an indexable diamond insert. I will post some pictures later on this afternoon, so that I can show you. Whether you use Kennametal, ISCAR, Sandvik, etc., it is possible to have any of those manufacturer's inserts available in a single crystal diamond format so that the client's expensive investment of toolholders isn't wasted. Whether the operation is milling or turning, this can be accomplished.
In reading his goals, he did say that he'd like to "optimize the process to cut down the production time and costs as much as possible". This can be accomplished by reducing the amount of steps that it takes to complete the part, attain a better surface finish, and please the client.
We presently have a client in the Microwave industry that is manufacturing duplexers, couplers and a host of other aluminum based parts. Their original operation consisted of face-milling the parts with either 3", 4" or 6" flycutters with APKT carbide inserts installed. Then, they'd sand the parts by hand with fine-grit sandpaper to achieve the best results. The problem with this procedure was that the surfaces were mating surfaces, and they had a difficult time in maintaining consistency throughout the lot process. Now, bear in mind their machines are not the most rigid either, but we were able to cut down on the time-consuming sanding process by replacing it with the the following procedure. They'd first rough out the piece with PCD-tipped inserts, giving them a better finish to begin with as compared to the carbide inserts. That would be followed with the use of a single diamond insert set up in the 4" face mill with blank inserts to balance it out). They would take about 0.002"-0.005" off on the final pass in order to get the finish they desired. The diamond has a 100mm Radius, with a 10° cylindrical clearance, and 0° rake. I will be able to post pictures of this later as well.
They have cut their process time by more than half at this current stage, sped up production, decreased their cost per piece due to longer tool life and less down time (fewer tool changes) and now can attain the finish they desire.