What's a pipe dream?

Meanwhile, back at the tussle between you and your client, "pipe dream," meaning an unrealistic or fantastic notion, plan or expectation, does not come from smoking hashish in a hookah. "Pipe dream" arose as a comparison of someone's loopy plan or perception to the kind of fantastic vision experienced by opium addicts, who, once addicted to smoking the narcotic, were said to be "on the pipe." Opium smoking was not uncommon among the educated classes in Britain during the 18th and 19th centuries, providing, for example, the dream-like imagery of Samuel Taylor Coleridge's 1816 poem "Kubla Kahn" ("In Xanadu did Kubla Kahn a stately pleasure dome decree…"). The use of "pipe dream" to mean "fantastic or silly idea" has been found in print around 1895, but was probably current in speech long before then.

However, and this is a great big "however," the fact that "pipe dream" originally referred to opium does not make it a "drug reference" today. "Pipe dream" has been in common use for more than 100 years and has long since lost any connotation of illicit behavior. You are correct. Your client needs to "just say no" to paranoia.

http://www.word-detective.com/042702.html#pipedream

unrealistic notion: a goal, hope, or plan so fanciful that it is very unlikely to be realized


[from < the dreams caused by smoking opium]

http://encarta.msn.com/encnet/features/dictionary/DictionaryResults.aspx?refid=1861726413

noun an unattainable or fanciful hope or scheme.

— ORIGIN referring to a dream experienced when smoking an opium pipe.

http://www.askoxford.com/concise_oed/pipedream?view=uk

A hope that can most likely never be realised in actuality.

A pipe dream is a fantastic hope or plan that is generally regarded as being nearly impossible to achieve.

-WIK