Yes - I think this is the thinking behind the rule that makes the JR Pass invalid on the Nozomi.

But, in truth, since the timetables were changed a couple of years ago so that most of the Hikari trains became Nozomi's... the Nozomi is not so much of a "premium" anymore. It has become the "plain vanilla" of the Tokaido Shinkansen.

I think JR tacitly acknowledged this - by creating unreserved seating cars on the Nozomi trains. (Prior to the timetable change, there were only reserved seats on Nozomis - and you had to pay a Nozomi premium over any other kind of Shinkansen). With unreserved seating, ordinary passengers can ride the Nozomi to Osaka and beyond at the same price as a Hikari.

The "and beyond" is the crucial thing - because if you're going further West (to Hiroshima, for example), it really helps if you can ride a Nozomi that goes direct from Tokyo - rather than the often rotten connection times that you get when you're limited to Hikari's.

So.... In my opinion (which is only my opinion and not that of JR or JTB or the JNTO or the CIA) JR should find a way to allow JR Pass holders to use the Nozomi. Maybe:
(1) open up the unreserved cars on Nozomi trains to JR Pass users
(2) give each JR Pass user one ticket that allows him to ride the Nozomi once during his 7 day stay

I know - there's no point in me writing it here. I need to write to JR East... well maybe I will.