You missed the point. I created that hypothetical situation to simply show the ambiguity of your argument. I'm not sure why you would comment it out, it's a story not a questionnaire..

Anyway, You can disagree if you like. But I think your letting your personal friendship, feelings or whatever cloud your judgement. He's your friend and you feel the need to back him up... I get it.
Dwayne's a professional, he knows what he's capable of catching and what he's not capable of. He also knows the standard of workmanship and professionalism that he holds himself to.
I'm a professional as well, I do my best to hold myself to a high standard of workmanship and I'm the first to kick myself in the ass if I feel I'm not meeting those standards. I also expect the same high standards from those I engage to do work for me.
Now if you think that I'm being too high in my expectations, then I guess that's your problem because you don't have to carry the responsibilities that I do and you don't have to solve the problems that I have to deal with.
Walk a mile in my shoes, then you might be able to offer some worthwhile opinions.
The last thing I will say on the subject is this. You asked where the responsibility should end for inspecting a set of heads. This is basically what I do with brand new untested heads:

Visual inspection for flaws, shipping damage, etc.
Check finish of machined surface's and straightness.
Check all the machined holes and threaded holes.
Put on a head gasket, intake and exhaust gaskets to check chamber sealing and alignment of stud holes, ports etc.
Straight edge along the valves to check alignment and heights.
Drop in a rocker shaft to check fit, height of pedestal stands and alignment with valves.
Check spring bases in head.
Guide clearance.
Seat inspection.
I may do other checks if they have been CNC'd of are known to have common quality issues.
If in doubt...call the customer....
You can get a pretty good idea if the heads are usable after this. You don't need to go crazy and put them through an MRI
It does not take long to do all this. It's not hard to do and I don't think it is beyond the ability of anyone who works on cylinder heads and has a high professional standard.
This is all done before any machine work is carried out, because if anything is wrong then the heads can be exchanged under warranty. Once they get cut you can't send them back.
It's also really important that this stuff is right if you are then going to send parts interstate or in this case overseas.