Since he's most aware of what the adventures will be, how the world works in the campaign, and probably most familiar with the history of the world and such, it's part of the DM's job to keep things on track and keep the "feel" of the campaign consistant.
Just like a director of a movie will seek to keep the look and feel of the film on track and consistant.
But he's not an all powerful dictator. (Or at least shouldn't be.)
Like any good leader he should be open to the thoughts and feelings of his players. Just like the good director listens to suggestions and thoughts of his actors, and editor and cinematographer.
If there's a reason that something won't "fit" right with the campaign world then the DM should explain his feelings on the issue, and WHY he doesn't want something in the game.
It should never simply be "cuz I don't want it there."
Explaining why goes a long way.
I largely agree with this, but with the addendum that if it doesn't fit the DM not only needs to explain it to the player, but find out why the player thought it would fit. If people are on different pages about how the game should feel, problems will ensue.