That’s an argument falling back on the old Biological Species Concept that is often still taught, but not really used in professional circles much any more because it has too may exceptions and problems.
The issue of what constitutes a species was addressed just a few days ago, and I linked some resources to highlight the difficulty of coming up with a universally agreed upon definition of a species.
A major point is that the amount of genetic difference is sometimes not as important as where that genetic difference takes place.
The genetic difference between coyotes and gray wolves is larger than that between domestic dogs and gray wolves and is enough that genetically coyotes and gray wolves can be easily distinguished from each other. Their ancestors split around 2 million years ago, although other studies put the divergence closer to 50 thousand years ago. Determining the exact splitting date is difficult because of repeated hybridization between wolves and coyotes over time.
In addition to genetic differences, there are a host of behavioral differences that set coyotes and wolves apart.
The basic point is that just because two creatures can produce viable, fertile hybrid offspring doesn’t make them members of the same species according to most modern species definitions. Arguments that it does are based on an outdated concept of how to differentiate species.