Just for the record i never thought that my argument was probable, I just wanted to show her that my argument was just as valid as hers (both being unprovable).
Of course I know that we can never truly know what the animal feels, and their behavior we can only study to give us an idea of what it may be feeling based on other observations. I never said that animal behavior was an exact science. Regardless I still believe that we can have an idea of how an animal is feeling based on various indicators. If we never had any idea ever of what an animal may be feeling then animal behavior wouldn't be studied as it never would give any predictions better than random. This is how I base my argument, that we have behavioralists that can make predictions with a better than random chance of it being correct based on other observations. This is how I say we can "know" (read: very educated estimate) what an animal may be feeling.
Sorry, but if you agree that both arguments are unprovable...then you really can't justify keeping the animal captive, so be default I'd say that your friend is correct.
And I'm not sure how to stress this any more...behavioural scientist is not a synonym for animal psychiatrist. We observe behaviour, and try to understand the external factors influencing said behaviour. We may also try to understand how these behaviours relate to social interactions, predator/prey interactions, etc. No reputable scientific behaviour article will have a conclusion saying "therefore, the animal feels...". We may say "when the octopus is threatened, it will ink" but not "when the octopus is afraid, it will ink".
I quite agree with James that the question in keeping a captive animal is if it is being done ethically. Also, make sure you know the source of where your little octo-friend is coming from. I'm not really a fan of the aquarium trade..but there are some sources which are better than others. Also, Thales is very correct in saying animal ethics is "crazy town". When I do an ethics application for research...I have to write up a huge report saying exactly how I will keep/house/feed/transport/monitor/tell if they are sick/how to euthanise them if necessary/how many per tank and so, so much more. Then it goes off to a board who reviews it and sends back suggestions of what to change with an approval or disapproval. As a hobbyist, you don't have that...so do your research and have everything right...then if you're lucky, you might just end up with a "happy" octopus.