McMohan - 12:40 pm on Oct 25, 2012 (gmt 0)
Shaddows, I agree with your view about point 1 and 3. With point 2, the Penguin play, how does Google treat those links that it considers are manipulated, is the question.
My surmise is that Google discounts all the links that it thinks are manipulated and leave alone those that may be genuine. Now, most of the sites that were affected had a very high percentage of apparently manipulated links. Lets say a site had 30% of links with anchor text "Cheap Widgets" and another 30% links with "Discount Widgets" and another 10% of links with "Affordable Widgets". Google might take a position that it looks like about 70% of the links to this site are manipulated and let me not take any of them into account in my algo calculations. Rest of the 30% links look good and they stay. Now, the site suffers to a great degree for obvious reasons and remaining 30% links are too few and aren't optimized with keywords in anchor text and can't really help much. Site drops to a level one would say, "oh, my site is penalized!".
IMHO, instead of wasting time with removing those links, build new links so that site gets back into credibility.