A couple of decodes is highly unlikely to be a problem.
However decode does take extra CPU. If that is a bottleneck, then you might want to think about it. When a system is heavily loaded, then anything could be the straw that breaks the camel's back.
However scanning through large decodes can get very slow. If your decodes get to be very long lists, then sometimes you can benefit from finding a different strategy.
If you wish to educate your well-meaning co-worker about how to address performance problems with Oracle, I can highly recommend [link|http://www.amazon.com/exec/obidos/tg/detail/-/0072230657/104-4462303-5667164?v=glance|Effective Oracle by Design]. Tom Kyte does a lot to explain what a helpful mindset is, and also to point you at what likely problem areas really are.
Cheers,
Ben