I think I have been able to rationalize my query and I think what my buddy implies is somewhat incorrect.
I suspect that any decent amplifier has as much capacitance in it's own internal power supply as practically possible to handle short-term transients. I guess if an amplifier were to try to have enough capacitance to store energy for long-term transient performance, the size of the toroid and # of capacitors would not be practical. Long and short of it, an amplifier will almost always need the ability to draw from the wall peak current in excess of RMS current to either replenish it's own internal capacitance or to support the signal. I guess if you built an amplifer, like the 28B SST, for example, in which one puts 120,000 pf of internal capacitance and then "clamps down' on the amplifiers ability to attempt to draw peak current from the wall, the amp will run out of gas more often than not.
So, I guess my buddies thought process is that a 'good' amplifer with a properly designed power supply effectively does what the Torus RM-20 does in that it separates the power supply before and after the toroid? However, I suspect this is not practically possible unless one was able to build, say, an RM-20 into a 28B SST!
So, I suspect that what my buddy describes as 'clipping' is when an amplifier runs out of juice in it's internal power supply capacitance is the attempt at an amplifier to draw ample peak current from the wall, but as Torus and yourself point out, most amplifiers may try to draw up to 50 amps peak and will not be able to do it because of the nominal resistance of a wall outlet. So, in essence, the amplifier runs out of short term gas becuase it can't draw what it needs from the wall. So, the clipping is actually the starving of the amplifier by trying to draw peak current from the wall becuase the transients (which are likely more than 'short-term') have exhusted the internal capactinace of the amp and now it's looking to the source for more.
I guess the simple way of looking at it is that the internal capacitance on an amplifer is like a 'memory cache' on a computer. The memory cache stores little bundles if information that the computer will use over short periods to help speed up processing. It doesn't store 'all' of the info it will need. Most stuff is still kept on the hard drive or elsewhere. When the cache is emptied, the computer will go back to the source to replenish the cache and/or get additional information, if needed. So, a faster hard drive will get you better performance. So, if a stereo system were compared to a computer, the Torus would be the really fast hard drive.
It seems to sound right to me

Keith