Found it! I hope you will enjoy this as much as I did. f/60 men and fuzzwuzzyists! Here's the quote:

...I commenced systematic experiments that have convinced me that in the production of most of the qualities that distinguish pictorial from technical Photography the pinhole is not only superior to the lens but can never be equaled by the latter instrument. Apart from line and mass and values which are largely matters of artistic judgment and selection one of the greatest difficulties of pictorial Photography has been a satisfactory solution of the question of diffusion of focus. How to reproduce in a picture the various planes as the normal eye sees them nothing microscopically sharp nothing woolly. This the lens cannot do and every attempt is a compromise The f/60 men got everything sharp and lost aerial perspective; many of the so called fuzzwuzzyists, going to the other extreme produced results equally unpleasant. Sane workers stuck to the via media and attained a compromise that however satisfactory was never ideal. With the pinhole however no such difficulty exists. With a proper sized opening say a No 11 needlehole objects are just about as sharp as the average eye sees them and allowing for aerial perspective they are equally in focus whether distant six inches or six miles.
The article is on page 213 of this book: http://books.google.com/books?id=BWZUAAAAYAAJ

Cheers!