This is just about the only way that it could hurt the frame. It sounds to me like the mechanic doesn't know what they are talking about. Changing wheel size does not affect the the wheelbase since the axles don't move. Also the overall diameter of a 26" wheel with a fat tire is not that far from a 700c wheel with a skinny road tire. This should not stress the frame as long as everything fits.

The main problem with 700c wheels in a mtb frame (aside from brake mounts) is that it just looks plain silly. There's just something wrong with having two inches of clearance between your tire and your frame. I've done it, changed it back. Maybe your mechanic has done this too and was trying to come up with a reason not to create another frankenbike with kludged together parts.

Not that there is anything wrong with kludged together bikes (like most of mine).