What is the response to someone who disparages Muslims for venerating the the Prophet and says that saying "peace be upon him" is impermissible?

If the objector is not a Muslim, then efforts should be made to invite him to Islam. Then, it should be explained to him that invoking blessings upon the Prophet means asking Allah to praise him in the Highest Assembly. This supplication for any creature with that which benefits them poses no objection, neither rationally nor legally. It is like a person’s glorification of someone who has bestowed favor upon them, in a manner prescribed by religious law, without elevating them to the status of Lordship or Divinity. This is an act of acknowledging the greatness of the one being glorified and demonstrating their merit and standing.