Old timers and cripples use them. If you're old/crippled and can't produce clubhead speed, then by all means go graphite.
You just now saw that?
First time I've ever heard steel is bad on your back. I've heard it can be harder on your joints because steel producers more vibration, but I can't imagine it really having that much of an impact. NV may wanna chill it on his swing if his back hurts from a round of golf. Lag is your friend.
Actually, I've noticed a big difference between the steel and graphite irons.
Luckily I've never had to pay for any of them. Got my dads hand me downs before, then a coworker won a new set, and he knew I was looking for some newer clubs so he just gave me his. His had the graphite irons.
They are lighter so I feel better after playing than I did with the steel ones, though part of that may have been the vibration you mentioned. There is virtually none with the graphite irons. Feels much more solid when hitting.
That said, if his back is hurting, it's probably more his swing than the club, like you're saying.