Of course it's the raid leader's right to demand whatever entry requirements he likes, but that doesn't mean he's not stupid for demanding ridiculous requirements.

Now as several people have pointed out, there are perfectly valid reasons why a raid leader would want overgeared/overqualified people in his run, from farming emblems to speed runs to gearing up him or one of his friends in the raid. If someone in my guild was putting together a run like that, I'd gladly help them out. The problem is that it's silly to expect the same from people PUGing a raid in LFG. People are GENERALLY in LFG looking to run things to gear up, not because they are uber players with nothing better to do than help out in your run. If that's what you're looking for, there are plenty of guilds willing to do that kind of thing for their members.

That's not to say there should be NO requirements for PUGs, especially raids, but the discussion here seems to be about requirements above and beyond what's reasonable. Wanting to get people who will do more DPS than the tank or not stand in void zones is a lot different from asking for people who have MUCH better gear than is required for the instance.