Sounds like BYOD is working to me
If appdev wants to waste money on a laptop instead of just using VPN/Remote Desktop from home to his beefy desktop, he should pay the difference. And if he has to duplicate a server environment on his desktop/laptop to write apps, that's sure sign maybe he picked the wrong development tool in the first place.
Hard to tell if Grumpy IT Guy is for BYOD or not. He obviously knows the idea is you reimburse a certain standard amount to get your device. If you want something more, pay for it yourself. Seems fair to me.
He seems to like the phone idea, which is really what spawned it. It could also work on workstations if applied within reason. For example, we run WINDOWS 7, buy any Dell, HP, Acer, Lenovo you want that runs it. But don't show up with a Mac and expect to join Active Directory. Tablets could also be BYOD, since you don't do anything useful with them other than read emails and browse internet anyway.
I'm personally waiting for BYOS, Bring your own Software. That's when things will really get interesting in IT support.