ITA. I am totally with you on this issue (and apparently on a few others). And I am very AP, and I consider myself GD also (although I do say no and everything is not a consensus based decision). I am a loving, respectful parent, and I also do not coddle my child or walk on eggshells lest I destroy her fragile psyche.
If you wanna say no, dude! Say no. They will live on and they will also have far more important things to talk about in therapy than 'my mother said no instead of finding creative sing song alternatives whenever I screwed up.'
eta - I also wonder about the real lives of folks who can be so rude to other mamas on the subject of how important it is to be nice to children.