koan - 10:55 pm on Mar 7, 2011 (gmt 0)

In addition, it's important for webmasters to know that low quality content on part of a site can impact a site's ranking as a whole.

This is what makes most sense to me, of all other explanations. If the problem is content farms and their use of authority and high PageRank to try and rank for every possible (usually high paying) subjects by generating great quantities of pages, with no real care about genuine quality, then you come up with an algorithm that penalizes sites with a high ratio of thin, poor quality pages. That way, they can't continue polluting the search index without consequences on their own performance and have to refocus on making fewer, high quality pages.

I will focus on blocking or reducing exposure to pages of little use to searchers.