There are 3 main options when working with static files:
- Place a static, non-refreshable "copy" of the file on Tableau Server by publishing this to Tableau Server as a data source, and selecting the Include External Files option (this can be done with or without an extract)
- Place a live/direct connection on Tableau Server by moving the Excel file to a shared-drive that Tableau Server can reach, or on something like Google Docs, and publishing the live connection to the server
- Place an extract of the data source on Tableau Server which refreshes on some set schedule
Option 1 is a static file, which is an obvious con if you need it to update, but is extremely simple and doesn't require outbound connections to a datasource.
Options 2 and 3 need connection to a shared location, and in some cases a scheduled refresh, but there shouldn't be issues with this generally.
When you say you "place your data sources on the server" I can't tell if this is through publishing or if you actually put a copy of the excel file on the machine hosting Tableau Server. If the latter option, I see why your admin wouldn't want this, and any of the 3 I mentioned are viable options. If it was just that you publish them to the server, there isn't a better option that doesn't require publishing to the server - this is how data sources are rolled out in a central location.
I recommend all of the above 3 to customers depending on their specific needs, and think any of these are valid options for any size deployment. If this doesn't answer your question, can you give us more insight into why he/she doesn't want this?