Just got off the phone with the Pastel Society of America. I also just spoke with the president of the International Association of Pastel Societies. I know, I took this too far. Here is what they both said almost word for word.
"The medium does not matter. It is still a painting. If the work covers the whole canvas, which The Scream does, then it is a painting. Ask your friend if he applies oil paint to a canvas with an exacto knife if it is still called a painting, or is it a knifing? The pigment that is in Pastels is the exact same as the pigment in oil paintings. If a pigment is being applied to a surface, it is considered a painting, no matter the medium, wet or dry, hard or soft."
I think that is pretty much case closed. She also went on to say that it is not wrong to call it just a "Pastel", but to say it is not a painting is wrong.