That's the most ridiculous thing I've ever heard. Music theory is for all instruments. Your teacher should not be teaching if he's passing on wrong info like this!
The piano lays everything out in a simple way and is used by many teachers to help with teaching theory but I have never learned this way and I also have never taught in this way. Think about his statement for a second.
If you can't learn music theory on anything other then the piano how are you going to apply it to the guitar? It would be impossible! If you can apply it to the guitar then it can be learned on the guitar. Again this is a completely wrong and ignorant statement anyways. Maybe he needs to go back to school again!
Another myth is that you need to have the ability to read music to learn music theory. It can make things a little easier for explaining certain concepts but definitely not mandatory.
I studied at a music conservatory and I was already at a more advanced level in music theory when I arrived. It was only here that I was taught any music theory using musical notation. Also the teacher actually taught music theory using his guitar! So there goes your teacher's theory.
One thing I would suggest is just take a look online for some books on the subject. There are tons on amazon. There is more proof against your teachers statement. Tell him to go to amazon and check out all the books written on music theory written specifically for guitarist!
The other option which might be a very wise option is to take some lessons from a good teacher. They may or may not use a piano to demonstrate something but I can guarantee you won't be sitting in your guitar lessons learning everything on a piano. Again what are you going to do with it after you learn it on the piano? Answer: You need to learn it on the guitar!