IMO Penguin demonstrates a potential weakness in managing the SERP's for all stakeholders and participants. Forget the science for a moment.
btw - This thread is a bit more refined on this topic
The science of brand is the only question here and it does decide the difference between being a winner or a loser.
Google's organic results are absolutely 100% free... it doesn't cost you anything to be #1 - in fact, it doesn't cost anyone anything to be #1 which is why Google isn't hammering out the little guy... the little guy is doing that to themselves.
You can certainly do a fair amount of webspam and get away with it... so can everyone.
The more legitimate assets you have the more cover you have so some can last much longer than others but what you can't do is survive on it forever. Webspam isn't sustainable... so you need to use it as a catapult; to build a competitive advantage so you can build the budget you need to compete at a new level.