people will use this while they see the huge sites doing very nicely thank you doing exactly the same. However as has already been said, rel=nofollow has nothing to do with indexing. It is simply stopping the linked page getting a vote from yours and so is purely a pr tool. To stop indexing you would robots.txt and use meta=noindex tags. Therefore how can google view internal rel=nofollows as anything other than pr manipulation. Internally it has no other purpose. Either they will feel its legitimate to filter your own pr as you see fit in your own internal voting system or they will conclude it will skew their results because only savy webmasters will be doing this.
but it goes pink with meta=noindex..not just rel links.
I think the biggest confusion is people think it literally means what it says..nofollow..but it is not a nofollow tag..its a no vote (pr) tag