Good post in general, but you're being needlessly harsh here. Drawing a firm line between the DM's game prep and the game itself doesn't make sense. The DM can set every encounter ahead of time, trying to plan the challenge level carefully, but if when the encounter actually happens they find they were wrong about how challenging an encounter is, changing it at that point is "cheating?" If the DM gets to set the encounters in the first place, why is changing them on the fly cheating?
Changing a creature's AC once battle is joined is precisely identical to fudging a player's attack roll (regardless of the direction you fudge). Changing a creature's hit bonus once battle is joined is precisely identical to fudging its own attack rolls (regardless of the direction you fudge). Both decouple consequence from choice, whether for or against the players.
I think they're assuming the DM will be too tempted to make those on the fly changes to make the fight harder, so as to threaten the players more, and they think that's unfair. I could be wrong.
Nah, it's equally bad whether it's for or against the players.
When the DM fudges dice or stats (the two are mathematically equivalent), it decouples the connection between in-combat choices and in-combat consequences. If fudging genuinely never occurs, then the player can
evaluate the connection between action and consequence fairly, even if the appropriate evaluation is "you shouldn't trust the dice so much." When secret, consequence-altering DM intrusion occurs, whether it is rare or common, you can't do that anymore. You can never actually
know that it was "your fault" if things went wrong, or "your victory" if things went well, even if the difference between fault and victory may have come down to the whims of dice.
Keep in mind, here and elsewhere, "fudging" as I understand the term requires that the DM
conceal it from their players, to the point of hoping that the players never discover that any change occurred. That deception is a huge part of what makes me oppose fudging, whether dice-fudging or bonus/target-number-fudging, and why I call it cheating. Active deception about how a game works--whether for or against the player's interests--very much fits the meaning of "cheating." A croupier that stacks the deck, so that a player loses
or wins at blackjack more than chance and skill would allow, is cheating despite merely being the game's referee.
But adjusting the parameters to make sure the PCs survive isn't so easy to do. It's always possible for a GM to use their authority over the fiction to introduce a helper or rescuer - thus sticking to an "internal" logic rather than going "external"/"meta"/"fudging" - but this doesn't seem to be a very popular approach. The only RPG I can think of that expressly advocates it as a GM technique is Prince Valiant - but much as I love Prince Valiant it's not something I've ever done, because it can really seem pretty cheap. I prefer systems that allow flexibility in consequence narration, so that even if the PCs fail in a challenge the overall game can go on (I've used this approach in Prince Valiant, in Burning Wheel, and in 4e D&D).
Often, I find a foregoing commitment to "combat does not have to be lethal if you don't want it to be" helps a lot here, but even then that can be dicey. So I have a secret weapon.
I change numbers....but I do it
in the open. Not "I physically change the die" or whatever, I mean I
tell the players, "That attack should have hit you. You KNOW that attack should have hit you. You have enough fighting experience to know that you
absolutely should be bleeding on the floor right now...and you aren't. You don't have time to ponder the ramifications of this right this second...but SOMETHING is up." If I'm feeling fancy, I may add more flashy descriptions or give more specific details (especially if a good idea strikes). Works just as well for opponents if I "need" them to survive a little longer or whatever.
This, unlike fudging as described above, does not interrupt the ability for players to learn from consequences, because it isn't concealed from them. They can
see that something is going on, and learn from/about it. They can do research later to try to figure out how it worked, how to exploit it, or how to prevent others from exploiting it. It becomes part of the experience.