tedster - 7:05 pm on Aug 14, 2010 (gmt 0)
The reason that 301 to the Home Page (instead of 404) can cause trouble is pretty straightforward - it's technical deception.
A 301 says that the content has "Moved Permanently". But in the case of removed content, it hasn't moved, it's just plain old not available any more. I've seen Webmaster Tools warnings about too many 301s of this kind.
With several variations, this kind of thing has even been a part of those practices that Google considers "black hat". This history (along with poor technical execution) means Google needs to trust-check every 301 before its effect is allowed into the rankings.