This DM is cool...
...because that DM is I.
I run an "anything WotC" campaign from levels 1 to 20 (currently at 14) just so I can see what breaks and what doesn't. The players have learned "what's good for the goose is good for the gander" and are about to learn that rule specifically in relation to their abuse of another damnable Spell Compendium spell that I hate. Note that I hate it for its flavor, not its mechanics.
Anyway, yeah, I *do* have a few limits:
1) Dragon magazine is not core; it's stupid. Nothing Dragon.
2) Books of Vile Darkness and Exalted Deeds are reserved for shockingly evil or good characters, so unless they want me making their moral judgments for them, they will stay away from these. PCs have learned to stay away from those books.
um, there are a few tiny houserules here and there, like no Massive Damage, etc, but really I try to be quite inclusive. One of the PCs has that Divine Metamagic (maximize spell) and Extra Turning nightmare, and I resent it, but only because it's not good flavor, not necessarily because it's totally broken. After all, what's good for the goose...