I recently recieved a daily halacha from a Rabbi who says that it is permissible to live outside of Israel, and describes why. Is this correct? Is it an obligation or not? How does one respond to this?

As far as I know, everyone agree that living is Israel is a very big Mitzva, and the value of doing the Mitzvot in Eretz Yisrael is much bigger than doing them in the diaspora. Every G-d fearing Jew that wishes to increase his Mitzva fulfillment in quality and quantity should try to make Alyia. Just like people wear a garment with four corners in order to do the Mitzva of Tzitzit, though no one is obliged to wear such a garment, just for the Mitzva. A Jew should try just the same to make Aliya, even if he thinks there is no obligation to do so, since the fact he is in Israel will increase the value of his Mitzvot. Hence, there is no reason in debating if it's a Mitzva, and people are obliged to make Aliya or not, living in Eretz Yisrael is a very big Mitzva. Every Yare Shamaim who likes the Mitzvot has nothing to do in Chutz La'aretz. Every day he stays out of Israel it is as if he has no G-d (Ketubot 110:2), and is worshipping idols. And whoever lives in Eretz Yisrael is like on who has a G-d (ibid). One who lives out of Israel and detests the desired land is following the footsteps of the Meraglim. Rabbi Zalman Baruch Melamed