That would be interesting to see one of your design example and one of your co-worker design to see what you mean.
There's no issue in working in RGB and then converting to CMYK if you know what you're doing. Anyway some filters are not even available in CMYK mode.
What counts is the final result; 1) does it look awesome and 2) Is it well printed or could it have been better?
I do the same thing as you to get maximum impact and that luminosity. It brings a dimension to the images, it's not "flat." And because I don't use fancy effects that (I think) should not be done in vector, my stuff prints well everywhere. I still use Distiller too.
In fact, there's a lot of situation when it's better to use composite effects rasterized instead of the vector option; for example some gradients will have that bending effect amplified in vector while you can make them smoother with Photoshop and some noise & blur. And if you do ads for online use, it looks ugly to have those white lines caused by transparency in the PDF because it was done in InDesign or Illustrator.
For the RGB converted to CMYK sometimes it's easier this way. And then you simply boost up your colors AGAIN in CMYK. It's easy and I guess that's what you do. As long you end up with CMYK, it's alright.
Regarding the rasterizing part:
Yes, your images will ultimately get converted back to a lower ppi at the print house. But if you're using a higher ppi it doesn't hurt, in fact you might be able to reuse these designs easily and save time if you need to work on a bigger size layout. It's smart.
You need to be careful with the text and only use these things on your picture montages when you can. But let's make things clear; we're talking about body text, subtitles and the like. Also, if you need to do a map for the subway system for example, yes you should prioritize clarity and vectors above "shinnies." Always put the priority first on the main goal of the ad or layout.
When you create a poster or a flyer, you can freely use the main title and the text boxes with an effect and have fun with your design the way you do already, but make sure you rasterize WHEN IT'S NECESSARY. If you can do something in vector, for example a text title with no effect and has a simple color fill, do it in vector.
One way I like to do this, for example, is to create the montages that need to be composite in Photoshop but if I have text I typed that can be easily converted to vector, I do it at the last step of my design; I'll keep the shadows or highlight effects in Photoshop, remove the text layer, and I'll add that text part in vector on top of my composite montage in InDesign or QuarkXpress. If I can't replicate that effect in vector then I don't and I leave it in Photoshop.
Some effects are meant to be done in Photoshop. For example, a designer can swear vectors are the best and decide to do a golden letter effect in vector... but compared to one done in Photoshop with all the shine added to it, that vector will look fake and plastic! So in that case you use Photoshop because it gives the best final result. Another example: They'll use clipping paths while in fact a channel mask would be nicer and smoother. At this point, it's laziness that can be blamed.
Some designers think using vector will make them better but when you look at their layouts, they're boring as... well they're boring. But yes, their boring design is sharp. They might not attract attention but, hey it's sharp...! My philosophy at this level is: Microsoft Word too can output sharp designs, but it doesn't always add value to the eyes of the target market to who the ad is destined to be sent to.
If you use the maximum of all the available features and the max quality you can get for print, go for it. Some designers forget that SOME clients don't care about a big title being in vector or not, they don't even know how to appreciate good printing but they ALL know how to appreciate what they feel is awesome. So that's the challenge basically, using the max of everything. It's your job to make sure you don't only prioritize style only but clarity too.
If you were hired by one of the most prestigious magazine to do their layout, they will expect you use the maximum of rasterized images and vectors combined when it's possible; but they will find it idiotic to limit yourself in a certain kind of design because "it was always done in vector." The response will be something like "I don't care, it look like... well it looks boring. Do something with more 'pizzazz'!"
So make sure you use vectors or even line-art bitmap @1200ppi+ colorized when you can. For the rest, keep doing what you're doing. Some designers are simply annoyed seeing others using different techniques because it makes them feel insecure that you get better results with your own techniques. But people who dare to do things differently and get good results are the ones who are called innovative. The others are just followers or replicators.
Please do not use small text or shapes that could easily be done in vector in Photoshop. If you do that then yes, it's wrong. Find a way to make that text look good without rasterizing it. Or put the emphasis on something else.
Can't you show an example anyway of how you split your vectors and your rasterized elements? It's still possible your co-workers are right too. You can't rasterize everything, that's for sure.
Some info on ppi and lpi
And extra trick if you like to do small layouts in Photoshop or import your text easily to add it back on top of your composite images in InDesign: How to keep the text in vector in Photoshop without rasterizing it or flattening the layers when exporting to PDF?
Sometimes, rasterizing is necessary and why it works better with Distiller
Careful with rich black when converting back to CMYK and this with more details
Optimizing PDF even more (You can still output a .ps and use Distiller, and then use this in Acrobat!)