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My sympathies Pelican, not a pleasant spot to be in...
and yeah I have to agree with tfld that the short answer to your question is "No, the customer isn't always right." Then again, the landscape contractor doesn't always know what's best for the client, but in this instance...
On matters of style, when you know complying with the customer's request will result in wholesale ugliness, you have to stand your ground.
Refuse to do ugly work.
I've found the untrained eye is drawn first to obvious flaws in a landscape, a dead tree, rampant plant, or vast expanses of gaudy harsh gravel mulch. You'll have a hard time being stealth enough to distance your company from a foundation planting full of white quartz chips.
One tack you might take is to explain the benefits of a tasteful stone mulch versus the drawbacks of the white chips. You already mentioned focusing attention on the mulch and not the plants, especially true in the shade. You might add that in full-sun sites white chips will stress the plants and produce enough glare to hurt the eyes. No matter what, this product will grow dingy looking as dirt, dust and other organic matters find their way into the bed.
Stick to your guns Pelican, or punt the whole project.
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