hayek
Explorer
I look at it this way though. In the grand scheme of things all DMs are doing something like what you call the 'narrativist' approach. In other words you look at the PCs and what they have and you look at the adventure you want to run, and you figure out how to make sure the PCs have the resources they require to have fun in that adventure. Likewise if the PCs somehow come up with some ridiculous amount of treasure somehow the DM cuts back or even figures out a way to make them dispose of it. So I think it is basically a question of how it seems to the players. The thing to keep in mind is everything in DM-land is smoke and mirrors. Until it shows up in play nothing is cast in stone and the players rarely, if ever, really get much of a glimpse of how the DM came up with any given story element.
I agree most people will have some narrativist tendencies, rpg's are usually about telling stories. Nonetheless, the idea behind a simulationist game is that even though the players don't see the background of how something came to be, the dm plans it out and sticks to it as though it were 'real'. He handcuffs himself beforehand so that everything he does to the players is a fair fight. I don't enjoy playing that way myself, but that's how you get GMforPowerGamers's examples of a level 1 character pickpocketing 7,000gp, and the DM laughing at the players for leaving treasure behind. The dm can do that because it's 'fair' if the world is planned out beforehand and the dm sticks to it.
I'll admit that this style of game rarely works out because the players have no way of knowing if the dm is being honest and fair. But if a group is into it, I think its how you make d&d a competitive game of the players vs. the dm, rather than cooperative storytelling. Not my cup of tea, but some people enjoy it.