There is a problem here and it does not have to do with hiding from an opponent. YOU are the one running the game, not the player of the rogue character. As such you are in control of rules adjudication and if you say that he can't do something then he can't. Even if the rules say otherwise. I refer you to page 32 of the DMG for a suggestion of what to do if you've made a decision about a rule and a player wants to argue about rules.
I figured something like this would come up. Aside from the fact that there are obviously different approaches to DMing (Runestar's comments cover the opposing view quite effectively), this is the best way of dealing with this particular player. Should I respond to this rogue with simply "I'm the DM, I know how the game is played, do as I say," he would throw a tantrum and probably eventually leave the game.
Hmmm... actually, now that I say that out loud it sounds like an excellent outcome

In this situation, I blame myself for not realizing the CA issue would come up and preparing for it before the game
