26x7.5 Is that a MT drag tire? MT lists that as having a section of 6.3"
5.25" wheel w/ 3.5" back has 3/8" offset and results in 3.15"- 0.375", or about 2.775" tire outboard the rotor face.
Maybe I'm missing something here but backspacing to my knowledge is from the mounting flange to the inside edge of the rim. A 5.25" rim would yield 5.25"-3.5" leaves 1.75" of rim left. Where are you finding an extra inch of rim?
Assuming the same suspension / brake combinations your tire is farther inboard by about 1.5", so it likely clears the front edge of the wheel opening, where if his tire was as tall as yours it would not.
Either way 26" will be pretty close on an A-body.