Pretty sure that's a misquote.
What I would more likely have said was that reading your players is an essential DM skill, and if they ignore the warning signs and go barreling ahead into the dragon's mouth, either you have Retarded Players syndrome or fucked up somehow. I do consider it part of the DM's job to set up the world in such a way that it takes a modicum of effort for the players to actually commit suicide. It is a matter of extent. If a shady guy mentions an ultrapowerful dragon in the hills and the PCs go running off to investigate, and then they meet a little girl, she asks them for [magical item], they say no, she turns into an ultra powerful dragon and kills them, that's a failure as a DM. If you post clues but they're subtle and easy for the party to miss, and they do something reasonable and get OHKO'd for it, that's a failure as a DM. If you give the party information that this guy is probably hardcore, and then they forge ahead anyway, and you write up a CR+1 minions encounter and then a CR+2 boss encounter for them and they die in the fight, that's not a DM failure(probably).
I've never had players angry at me for dying, and I run brutal horrible games that often have permanent injuries, deaths, and rarely (I swear, far less than it logically seems there should be) TPKs. I signpost well enough that the PCs usually know it's insanely dangerous and it's not 'hur you died' but instead bad rolls, bad luck, or bad tactics in an extremely dangerous situation that kills the PCs, which is usually fairly obvious so instead of 'grr evil dm' I get 'let's roll a new party and go level up and get revenge'.
That means it's a natural psychological reaction on the part of the players, when they roll exceptionally well and get no meaningful result, to assume that the DM is simply arbitrarily negating their use of the skill, and, by inference, their skill choices. Arbitrarily negating PC choices is deprotagonizing, and as such, should be avoided in general per an old thread regarding a paladin and a Drow slaver - even when the deprotagonizing result is based on perception.
So you run social checks as specific result? Player:'I roll a gather information check to find the orc camp did I find it' DM: 'yes/no'
That's not really how the PHB says they work. PHB says you can gather information on a topic, and if the topic is too specific you might get information about things related to it but not the thing itself. So you might get that 'that orc boy and that girl have been sneaking off into the woods TO THE SOUTH on a regular basis' when you ask for '
orc camp
location' Or you might get the location of a guy who knows about orcs and he's spying on the orcs and thinks they have a breeding program to breed out humans (he is a psychotic bigot) starting by
seducing(not stealing) X girl etc etc and you drop clues that she is in LURRRRRVE as they investigate. You don't need to write up townspeople encounters. If you have trouble adlibbing NPCs, you should have some notable ones noted down for exactly this kind of thing.
Reasons why the haunted weapons shop may be important (I have to qualify with "may" because this example has been an organic, off-the-cuff one rather than scripted) include:
Provided the encounters helpful to allow the party, or some significant fraction thereof, to level before encountering Smells-Like-Farts. Whether or not the party has access to Haste or Greater Magic Fang could be significant mitigating factors in the difficulty of said encounter.
Provided the party access to magic weapons and/or materials and instructions for upgrading their own weapons (it is a weapons shop, after all), which, again, can greatly influence the nature of their encounter with Smells-Like-Farts.
Provided evidence hidden from the townspeople (or not obtained via Gather Information) to indicate Smells-Like-Angst and the daughter have been busy trying to find out where half-orcs come from, influencing how they approach or even consider their goal of rescuing her.
DM controls difficulty of the encounter. If you have outright said that the orc camp has a 5th level shaman and a 4th level fighter and smells-like-farts is a 3rd level rogue 3rd level swashbuckler and there are 40 orcs and 3 ogres in the camp, a) what b) why and c)argh. Reduce all the levels by 1 except for the shaman and make the shaman distracted (turns up later in the fight) and some of the orcs out on patrol (say 20). Players have no way of knowing the level of melee characters. If they go HEY just go 'customized stat array' or 'you don't get to see the sheets of the enemies, just trust me they are correct'.
Party therefore shouldn't need xp to fight orcs. If you need 5 minutes to re-write the stats, that's fine, but if you're bad at altering stats on the fly, i'd keep several sets of stats for various things like 'they didn't go to the weapon shop' scenarios.
Get special weapon to kill Smells-Like-Farts - this is a real reason to need to go to the weapon shop. If smells-like-farts is invulnerable or something. For plot reasons. If so, though, to avoid railroading them to go to the weapons shop, have alternative plot ways to get past his invuln. The family sword the paladin's girlfriend has? Totally is a heirloom of the original smells-like-fart killer. Smells like Farts for some reason has weaker attacks than you planned for him, party runs away, hears rumour about crazy super weapon forger guy who died and became a ghost /trapping his orc super murdering swords in his forge hint hint/. Someone who someone else cares about dies and it turns out THE POWER WAS INSIDE YOU ALL ALONG. Watch the party smother him in earth, chain him up, and drag him around the place like loot. Drop hints about him being invuln, let the party see him being invuln, they charge in anyway, they die, new characters. etc etc. there's lots of ways around plot-devices like that.
Evidence - evidence should be in many places. Consider the Three Clue Rule. That's Three Clue MINIMUM. If you rely on players going to some specific place and finding some specific thing, then either they're not going to find it, or you're going to railroad them there.