I think that you have every right to rule the way you want to in your game...and I agree with you that it makes no sense for this to work on a fire elemental (or air or earth for that matter).
That being said, however, if *I* was the wizard in your game and you hosed my spell with this call, you can bet your last dollar that I would be pouring over each and every spell entry. I would be looking at the flavor text oh so carefully looking for every nook and cranny of advantage I could get and try to get all kinds of things to work that shouldn't using the RAW.
EXAMPLE: I opened up the SRD to the very first spell, Acid Arrow. Does 2D4 damage to the target for 3 rounds. So, what makes sensewise, whenever I shoot someone with this spell it should be damaging their armor/sheild/weapon/whatever, not just them. If I fire off a couple of rounds of Acid Arrow at a fighter in full plate does his plate armor take the damage instead of his hit points....chances are I shot his armor with the arrow, not his skin. Thats what makes sense.
DS