I thought PADI had a 60 ft limit as a recommendation for new divers, not a rule. Also if the dive has a max depth limit of 80 ft. why couldn't the diver stay at 60 ft. if they wanted ?
Correct. It's a RECOMMENDATION ONLY, not a hard and fast rule. This DM is way off base to say it's a rule.
Good self evaluation skills and common sense are all you really to decide what conditions one should dive including how deep.