Thanks for hammering away on that point, Bill. It's an important one.
1. First comes tagging a page (or pages) as what Panda feels is shallow content.
2. Then comes a site-wide calculation of how much those page scores are going to influence scores for other pages on the site.
3. And since Panda 2, the possibility that some pages will be identified, even on a Pandified site, that the algo decides are good enough to give a boost, past the negative scoring.
I've seen real world examples, so I know that a site can lose a lot of rankings and still be strong for other keywords, even "big" keywords.