Now, I agree that it could be a bad idea, but that would depend on what the actual implementation was.
My friend was absolutely correct when he said that this sounds like a terrible idea, but let me paint a scenario for you:
On the morning of the election, terrorists carry out an attack on Manhattan that's on the scale of 9/11. Chaos reigns in the NYC area and essentially no one from the urban area is able to get to the polls and vote. Upstate New York is largely unaffected (directly), as is the rest of the nation.
Everyone who does vote goes out and votes in exactly the way they had intended to prior to the attack, since everyone had their mind made up anyway. But without the NYC area vote, upstate New York carries the day for Bush and the Republicans who collect the state's electoral votes and win over Kerry and the Democrats in a race that's as close as the 2000 election.
We then hear four years of complaining about how Bush cheated and stole the election by not postponing the election given the state of emergency in NYC. (Mind you, he would have had no authority to do so.)
It might be a very good idea to postpone the elections, depending on exactly what happened and who gets to make the call. If, for instance, an election could be postponed by the unanimous concurrence of the President, the Vice-President, the Speaker of the House, the House Minority Leader, and the Majority and Minority leaders of the Senate (or as many of them as are alive) in the event of a terrorist attack (or perhaps a power outage like we had that blacked out much of the Northeast recently -- *oops* the fancy electronic voting machines aren't working), that might be a good thing.
Wouldn't you agree?