I've been following this discussion with interest. I recently joined LuLa, and for just this sort of repartee.
Here's an observation: The first major exhibition of the French impressionist painters, the "Exposition des Impressionists," was held in the salon of the photographer known as Nadar. From that point, painting has progressed through various degrees of freedom, almost always with some negative criticism along the way. In fact, this 1874 Exposition was the subject of a very critical work which labeled Monet's painting, "Impression: soleil levant," as merely a sketch, more fitted as a wallpaper pattern than as a finished work of art. Photography also went through its travails, though rather more limited by the tools available. We had the "pictorialists" and romantics and we had the f64 realists (though they knew how to torture a negative pretty well).
Today, we find ourselves confronted with as much of a challenge as that faced by the art world of 1874, when something new burst on the scene. I think we're handling it badly, too quick to condemn anything which doesn't fit our notion of a proper photo, especially among landscapes. We fail to realize that none of our depictions of reality are reality itself. And we fail to allow latitude for those who want to stretch reality more than we do.
For me, the test is if I have a reaction to the work. Does it tell me a story? Convey a feeling? Does it do this well (even if not the way I would have done it just so)?
For the OPs photo, my answers are yes, yes and yes. It's a powerful photo, even if that waterfall was never blue and even if that tree was not so red. This view tells me something about what the photographer saw in his mind and what he felt and I value that.
I'll post one of my own interpretations of reality soon and see what happens.