A lot of people have this misconception, but it's really not true that the space is signaling too much of a division between lines of dialogue. You see, you're sort of right in that a line of space is the separation of one idea from another. However, what a lot of people don't realize is that every person's line of dialogue is an idea in its entirety. This is also why you would, in printed form, indent every line of an exchange as if it's a new paragraph -- because it is by definition. You're going from one concept (what one person says) to another. I'd hate to be a bit hard about it, but this is one of those things where it's actually pretty inflexible and also not a justifiable stylistic choice (even though you're certainly not the only one who believes otherwise). To be frank, it's more or less like any other rule of grammar. You don't disregard period rules because you want to tie every single sentence in a paragraph together with commas, so you really shouldn't do the same sort of thing whenever you should be adding in the signal for a new paragraph (which is, online, hitting the enter key twice to create that line break).
Also, think of it this way: if you go on for too long, the dialogue gains the same effect as a wall-of-text. It becomes difficult for some readers to navigate, and it just doesn't look neat to a reader's eye. If anything, it actually makes you seem as if you're not consistent about paragraph rules in general.
Again, I don't mean to be biting and a bit hard about paragraph spacing with dialogue, but there really is a reason why someone tried to correct you about that.