Both your posts are very well said EWHM.
I'll second Hawktitan's comment. EWHM's posts were well thought out.
I'd chime in with my own 'implicit understanding' contract with players -it might sound familiar:
"Do unto NPC's and you would have NPC's do unto you"
So - if the party consistently starts using Scry and Fry, they can expect a similar simulationist response from NPC opposition.
I'm ok allowing all sorts of spell abuse, as long as the party realizes my NPC's are now free to use the same tactics against them. Enlightened self interest and a sense of self preservation on the part of my players usually balances things out nicely.
I liked how EWHM described the two contracts. Someone could do a whole blog post on that subject (if they haven't already).