I think it's perfectly possible to create adventures tailored to the PCs without having an encyclopedic knowledge of what the PCs' abilities are. Some of that is knowing (or learning) the types of adventure elements that work well for a certain group, some of that is knowing what a given group of PCs want, some of that is knowing what a given group of PCs can do.
I don't know absolutely everything all the PCs in the parties I'm GMing can do (five or six characters, mid-high levels) but I am absolutely creating adventures tailored to those PCs' interests and desires, and tailored to what works for each group of players.
		
		
	 
I think 
@Blue 's original comment about knowing what the PCs can do was not so much about knowing every single thing about every PC so much as having a sense of what choices the players were making with character options and the like in order to then make sure to include those elements in adventure design/presentation.
When players make decisions of that sort, they're pretty much sending a signal to the GM, and the Gm should be aware of that. I largely agree with the idea. If someone takes the Linguist feat, for example, I'm going to make an effort to include elements that allow that ability to shine a bit. 
@Blue please feel free to correct me if I mistook your original point.
This doesn't mean that a GM needs to have an encyclopedic knowledge of every player facing rule, and I think taking the comment that way (not that you did that at all 
@prabe  , your comment just prompted my thoughts) kind of misses the point.
	
		
	
	
		
		
			There's a good one:
In a game about being wandering badasses with 80% of the mechanics being about fighting, it is a great idea to suddenly (without prior discussion) expect the players to flee from or avoid combat with something they don't know outmatches them and then berate them for trying to engage with the mechanics of the game.
		
		
	 
Yeah, I think if we look at D&D as a genre the way we tend to consider movies, then it would be the action movie of the RPG world. It doesn't have to be nothing but fighting, and there may be plenty of opportunity for other elements, but if there's no fighting at all, then D&D would seem an odd choice (except for the "it's what we know" familiarity factor).
It'd be like hiring Michael Bay to direct your film and then having him show up with explosives and giant set pieces and greenscreens and a stunt team....and then asking him to make Glengarry Glen Ross.