The point of gong to a restaurant is to make the event special. It might be due lack of space elsewhere or the ability to cook for that many people. 

Some places have rules about reservations, seating, food, alcohol etc...I understand that they are not in control of some of these requirements. And, has been suggested elsewhere, not every eatery is equipped to provide a special dessert or cake for the event.

In all of this, if they can't or won't accommodate such a request, then this will likely be remembered by the group the next time they have another event to plan. They may even speak with others who might voice similar ideas.

Yeah, the restaurant may get their way short term.

Long term, they may live to regret such rigid thinking.