For me it looks more like a decision that product manager makes - it's up to PM to decide how product looks like and what is it target audience. As developer all I need is requirement "should work in every browser" or "should work in most of browsers". That should not come from web developer, unless he decided what your product should look like which makes him PM. And it's not up to dev to argue about it.
Corporation that uses your SaaS and pays for it is one thing - on one project we explicitly said that only IE 6-7 is supported and customers were ok with that. Web site that may be visited on mobile browser is different story. But on mobile browser it may be not enough just to work without JS, you may need to simplify your page layout and reduce graphics usage as well. If you really need mobile users, you may consider making two versions of web site, fully functional JS-enabled desktop, and simplified, reduced version for mobile users.
Of course you should never rely security on client side JS.
Usually I prefer to deliver most of functionality without JS. For example readonly access to SO does not really need JS. And it's not that hard for user to enable JS if he really wants to post question. Posting question without JS is also not that hard, just forget about auto loading of similar questions.
Certain things can be done both in JS and server side, and it's still often a product feature rather than technical decision which way to use. For example voting in SO could be done without JS but that would involve page reloading - more frustration for user and more traffic.
