You do get desensitized to the smell, though. The first time cleaning the litter box I almost vomited, these days it's a mild inconvenience at most. When I get guests, I'll clean the litter box as a precaution, someone else's nose might think the smell is horrible but I'd barely notice it (I don't ever let it get that bad).
I do get the point from a landlord's point of view, though. Why take the risk if there are other tenants who don't carry that.
Although I think it should be negotiable with a larger deposit rather than flat out refusal. Pets increase the quality of life.