Lol classic - sorry but perhaps I didn't clarify the situation. I have many sites that haven't needed a finger of work for years - they all grow naturally and easily maintain or improve their rankings. Certainly "no SEO" doesn't warrant a penalty - worst case scenario it might mean a drop in rankings, but not throwing absolutely everything to 31st place.
The name of the site is fairly unique (not a keyword) - I've used it for usernames in the past and now those profile pages out rank the site for a search for "sitename". Those aren't "quality" results regardless of how the content on my site is perceived. Ban the site completely - fine, I don't care - at least those end up being relevant results (based on what Google has in its index).
I've spent a lot of time dealing with sites that have had penalities slapped on them (clients coming from dodgy SEO agencies) - never seen anything like this. I've no doubt that I'll find my site's particular problem but that really isn't the issue. This is affecting a lot of sites, a lot of which only have very grey or borderline infringments of quality guidelines. Perhaps better than an outright ban, but a significant change in SEO for Google (for better or worse) and certainly worthy of further research.