Just remember that if the GM goes to far with this, he or she may not have any players.
Or, the GM may have tons.
D&D is a bad example because there are so many rules. Take a game like classic Traveller where the GM makes up just about everything on the spot, and my point becomes much more clear (for those of you who can't see it).
I understand that players want to think of their GM as fair. Heck, I want my players thinking that.
But, still, there's no such thing as a GM cheat.
If two players were sitting down across a board--say something like Axis & Allies, then one of them could cheat.
But RPGs aren't played that way, are they? The same "rules" don't apply to player and GM. In fact, the GM enforces the rules as he sees fit.
If a player says that his character has his bow out and is ready, and then an unseen Orc pops around the corner. Initiative is rolled, and the Orc wins. The GM says, "Well, the rules says that the character should be flatfooted, but given your description of what your character is doing, I don't see it. He's not flatfooted."
Is that a cheat?
It's a clear vilolation of the 3.x rules.
If the player agreed with the GM's ruling, is the GM....cheating?
No, because it doesn't apply to the GM.