For assessing individuals (or even small groups), I can't imagine it being very helpful.
I agree with some of the other commenters too in that a full nutritional/lifestyle analysis over a long period of time is next to impossible because it relies on self-reporting which is known to be flawed [1][2]. People under-report their intake and overreport their exercise frequency and duration.
[1]http://www.ncbi.nlm.nih.gov/pubmed/2082216 [2]http://ajcn.nutrition.org/content/76/4/766.full
Why shouldn't he be classified as obese? If he was that heavy because he was working out then that would be one thing, but the reason he's that heavy is due to using steroids to put on low quality muscle mass. I don't see why that would be any less unhealthy than just sitting around eating doughnuts or whatever.
I also don't understand what you mean by "low quality muscle mass".
Muscle with a low weight to power ratio, and/or with an unfavorable type I to type IIa/b ratio. E.g. you can quickly bulk up by lifting 3 x 3 at a high weight (or whatever Starting Strength recommends), but you're going to develop much lower quality muscle than if you just do 6 x 10 or whatever in terms of power. And similarly if you're not doing cardio in at least 90 minute increments then on a regular basis then your type II muscles aren't going to be able to properly utilize fat, because they'll never get past the point of just relying on stored glycogen or whatever.
They also act as anabolics, so you could argue that the muscle mass gained due to their anabolic effect is "low quality" (that's not what I'm doing, though).
* = I suspect that a good number of guys like this are taking substances that would damage them in other ways that could lead you to describe them as unhealthy, but as another commenter said that's maybe not for BMI to measure.
As of this moment I'm 5'9", 187, and borderline ripped. People often compliment me on my physique.
But my BMI is 27.6, which makes me "overweight."
Note: I'm making an assumption you're in a western country like the USA or the UK