Denormalized table designs in normalized database?
Some issues to bring up:


For OLTP, inserts will be really slow in a table that wide
You will be wasting a lot of space by repeating redundant information
Columnstore is a non-modifiable index type so you can't use it in an OLTP environment
You greatly complicate referential integrity controls this way.  You can't just make foreign keys to make sure you are getting valid values for fields.
Indexing will be a nightmare


The real issue here is the developers not understanding design.

Keeping the client data in it's native format is FINE.  I do  this kind of thing for a living, and I get tables with 500+ fields all the time.  The way to handle it is to separate your RAW data from your BUILT data.  

If the client gives you a massively wide table, you need to normalize it yourself to make a usable data set.  There's nothing stopping you from creating a process that breaks out that data into appropriate tables.