>> Senior algorithm nerd on my project is going nuts over algorithmic complexity

This is me, but luckily where I work I have people who can keep me in check because we generally do design reviews before anything big is built.

However, I have been in situations at previous companies where big(o) was ignored to take short cuts up front, because the "data was small" and suddenly scaling to even just 100 users starts to break things because of poor design decisions when it gets into production.

I guess the lesson here is more the importance of design reviews. Also n^2 is HUGE even for small data if there is IO or api calls involved. Any public api you provide, that is n^2 is not a good idea because you never know who may end up using it for what.