I'd ask why they want it, in terms like "What operations are you trying to do that you can't" and "Please send me a screenshot that includes the error message".

Then figure out what the fine-grained rights required are, and the other things those allow someone to do.

For a development environment, I personally don't mind giving a developer ALTER TRACE, SHOWPLAN, and VIEW SERVER STATE permissions; I'd like them to develop efficient SQL, and running Profiler can help a lot.

If they want securityadmin or dbcreator, then I say no; they don't get to grant other security, and they don't get to create databases (i.e. without setting up index maintenance, backups, choosing the right recovery model, setting size and autogrowth reasonably, doing capacity planning, etc. etc.)