Just go with the overlaying of tiles if you really hate the toilet tiles.... You as customer can over write the ID/contractor. I have friends who overlay their toilet tiles(walls, floor) > 5yrs and it didn't have any issue till now. I think its a matter of workmanship standard from the contractor. If he has no confidence in that which is so common nowsaday, I think it is time you should re-consider looking to outsource that portion or change your contractor if you have not confirm him.