Planet13 - 7:48 am on Feb 15, 2011 (gmt 0)
It still leaves me a little hazy about the difference between an algorithmically applied penalty and an algo change that caused a natural ranking drop - one that's not a penalty.
I would kindly suggest that maybe Mr. Cutts is also hazy about it, too.
Maybe they don't really think of Algo changes as a means to penalize spam, but in their eyes, they just see the Algo changes as a way to turn down the noise and turn up the music.
The word penalty has a deep psychological meaning; that someone has done wrong, and hence they must be punished for it. It is revenge for acting out against the norms.
But maybe the googlers are beyond that and are just interested in learning from their Algo's mistakes.
That would explain part of the reason that spam reports seem to go unnoticed (as per the comments of many web masters who claim to have submitted them time and again). Because google is less interested in punishing violators (except in egregious cases such as JC Penny, BMW, etc.,) but are more interested in a long-term proactive solution (e.g., a better Algo), they probably spend most of their time just trying to improve the ability of the algo in detecting higher quality sites.
(Of course, the economies of scale play a part in this as well.)
So except for highly publicized cases, they forgo short term reactionary measures for long-term sustainable measures.