I don't agree with this.
The players make ALL of the decisions for the PCs. The DM makes NONE of the decisions for the PCs.
You are right that they shouldnt make the decisions, but the DM should be responsible for setting the ground rules. Regardless, Extended Rest is not a matter of choice, it is a matter of biology.
An extended rest where you recover Daily Powers and Healing Surges occurs because you SLEEP not because you take 8 hours to sit around doing nothing.
Unless you can find a way to justify an entire group sleeping every 2 hours, I would like to hear it.... No, it isnt and if the PCs want to wait around for 6-8 hours and THEN take their extended rest, that is a very extreme way of wasting time and if a DM has players attempting this, I would throw them random encounters every 30 minutes and the players would learn that an adventure that should take 3-4 sessions instead takes 30-40 sessions because the group want to fight random encounters all the time.
The DM influences decisions via his presentation of the world, but if the DM insists that the story has to run his way and that he can overrule player's decisions for their PCs or punish them because they "aren't playing the game the way he wants them to", then the problem isn't with the players, it's with the DM.
Extended Rest isnt a case of the DM overrulling a players need to long jump over a monster or figure a clever way to trick the duke into revealing his plans... it is a core rule that he is forcing the players to adhere to.
Like I said, the only way that a group can force a DM to allow them to rest every encounter is to sit around for 6 hours and wait for the need for an Extended Rest.
Whilst this is LEGAL and POSSIBLE it is ridiculous because you would never do this in real life... so to try and TRICK the game into allowing you this is pointless.
I am very stern on the idea of forcing Extended Rests to be as per a normal sleep cycle. The game is designed to have players using Extended Rests sparingly.
The story revolves around the PCs, not around anything else. No PCs = no story. That doesn't mean that everything that the players want to happen happens, it means that the PCs are the story. They are the most important part of the story. The rest is just the scenario that the PCs find themselves in.
The DM makes all of the decisions for what is in the world and what the NPCs decide.
The players make all of the decisions on what the PCs decide. Again, that doesn't mean that the player decisions always work out, it means that they make the decision on what the PC is attempting to do (like walk back into town to take an extended rest). Something might prevent that decision from succeeding, but it should be something inherent to the setting. It shouldn't be the DM punishing the players for not following his storyline the way he wanted them to.
Just to clarify
I am not saying the DM needs to overrule whatever the players want. The rule of "Yes.. and" is the best rule of DMing and if I was a DM and my group wanted to do something, I would try and find a way to make that work.
Excluded from this are things that try and BEAT the mechanics of the game.
Just like using a loaded die, forcing a DM to allow extended rests less than is warranted is cheating the system and I would not play with players who would force that type of game play.
This however is the freeform-ness of D&D, you can play however you want. If you want to make dailies work every encounter, do it... if you want to play in a Golden Compass style world where you have a Demon Animal Spirit to follow you around - do it!
I choose not to break the rule of Extended Rests being akin to a normal sleep cycle. I will not let any group I DM do so and would not be aparty to a group decision to force it on a DM I am playing under or allow the DM to make it a houserule that extended rests operate differently.
As a DM, you spend a LOT more time planning the game than the Players and whilst it is a group game and it neither belongs more to you than the others, there is a sense of respect that all DMs are due that comes from the hours they spend planning and prepping adventures as well as their time taken away from the PC side of the table to arrange the adventure.
If my DM told me that I couldn't do something I clearly would have all rights to do (aka take an Action Point I was due perhaps) I would disagree with him but would accept his ruling after making myself clear and possibly taking it up with him privately out of the game... The key thing in that is that I would accept what the DM wants because you respect the position. If that means the group / game / DM isnt for you, you find a way to deal with that.