I say it's time for this to stop.
The argument is simple. In real life, you lose. When a kid plays with his peers, he will lose. The sports team he roots for will lose. He will play video games and lose. Even when he's doing nothing more than drinking a coke he will play the look-under-the-cap game and lose.
Since the kid is going to have to deal with losing anyway, wouldn't it be a good idea to teach him early on how to cope with it? Learning grace, manners, sportsmanship - learning to be proud of your effort despite losing, all of this should be a priority.
I have a few childhood memories about this stuff. My first memory of losing was when I saw a new box of cheerios in the kitchen. There was some fabulous prize to be won if the card inside the box had the magic number printed on it. I tore open the box and found the card. The numbers were different. I lost. I remember not comprehending it. I didn't think that I was supposed to lose anything. I wondered if my mom had bought the non-winning box by accident.
I also remember a family wiffleball game in the park when I was about 9. My team was far out in front. In fact, we needed just one more out to seal up the win. There were two men on, but my seven-year-old-girl cousin was coming to bat. A ha! The easiest out on their whole bench! She predictably hit a weak dribbler to the mound, and I knew it was all over. I waited on first for the throw. But then my uncle, aunt and parents went into this 3 stooges routine where they deliberately fumbled, bobbled and tripped over each other, failing to collect the ball or pass it to anyone, and meanwhile my cousin was circling the bases. I screamed in agony and shock. Somewhere during this game-winning, in the park wiffleball homerun it dawned on me that my teammates were throwing the game. This merely doubled my incoherent rage. "You're letting her win! You're letting her win!" My cousin and her little friends were jumping for joy and I was on the ground, apoplectic.
This was probably where my opposition to letting kids win got started. In addition to making sure that kids learn how to lose with class, there are other good reasons to bring on your A-game when taking on junior. 1) How is the kid supposed to get better? As a poker player, I can tell you with certainty that one of the best ways to learn is to have your ass handed to you by a table full of superior players. That's what toughens you. Now if you're trying to teach a kid tennis, or chess, or something like that - how's he going to develop his ability if you keep handing him the confidence-building wins?. What about strengthening his intelligence? His tactics and strategy? The only way you can do that is by challenging him.
2) Is there nothing more insufferable than a kid who has never been permitted to lose? Do you really want to be around this whiny load? God forbid something ever goes wrong in his world - out come the waterworks and the tantrum.
In my opinion, the personification of the impulse to let kids win is the Sesame Street character Guy Smiley.
Guy was the game show host muppet. He'd have games like "Name That Shape!" (Yes! A decahedron!) and no matter what happened over the course of the game show, the ending would always be the same. He'd say something like "Well, the judges have totalled the scores... and... YOU ALL WIN!" And at home, at age 6, I'd be sooooo frustrated. "NOOOOO!!!!!!!!!!!" Because I wanted, just once, to see a muppet contestant lose on the Guy Smiley show. I was so eager to bask in the schadenfreude of a distraught, crying muppet.
Well, yes, Mr. Hooper died and there were plenty of distraught muppets then. But that was sad. I wanted to relish in the misery of a muppet game show loser. Never happened.
Now you don't want to totally thrash the kid at the game or the sport. You don't have to go overboard. But you don't just give him the win either. If you want him to log in a few wins once in a while to build his confidence, try a game that's mostly luck. Like Yahtzee. The kid will win his fair share of those. (unless he's really a moron)