A production server should be installed with the collation that best fits the application(s) it will support. If that means case sensitive, than that is the best collation, and not a horrible thing at all.
A dev server that is used to develop for deployment on a specific server should be installed with the same collation as where the code will eventually be deployed.
And dev servers that are used to develop code that may be deployed "anywhere" should always be installed with case sensitive collations, as that avoids making mistakes taht can be very costly (and a royal pain in the backside) to fix later. If your dev server is case sensitive, you'll get slapped immediately when messing up the case of object names, and you'll soon learn not to make those mistakes. If your dev server is case insensitive, you will, eventually, get sloppy with upper- and lowercase. And you will not notice that, not even get a warning, during any of your tests. Even your first deployments may go right - until your database is sold to a customer who is running SQL on a case sensitive collation, and he reports errors all the time. Fun! (not!)
So, I guess I do not agree with you.
Hugo Kornelis, SQL Server MVP
Visit my SQL Server blog: http://sqlblog.com/blogs/hugo_kornelis