The inspector might be referencing Article 408 Section 408.36 and miss applying it. In a nutshell you need overcurrent protection for a panelboard and the exception says that it's not needed if the feeder has protection sized to protect the panelboard. The '05 code say it's not required but I guess if you have it it's not a violation. the '08 changes it somewhat but the end result is the same.
That's like saying you need 4 receptacles in a wall space and you decide to install 6, that's not a violation.
There is no hazard with having properly sized feeder overcurrent protection feeding a panelboard and having the same size overcurrent device in the panelboard.
Sometimes a panel with a main is cheaper than a MLO.
