Some excellent points in this thread. This can be summed up by google has become too powerful and has lost the plot.
Why is a search engine dictating to the WHOLE internet how they should link to each other, how often they should update their pages (never seems optimal at the moment), how many images they have above the fold and a zillion other things I'm probably not aware of but if I do them...I'm considered 'bad' and having done something 'illegal'?
Go back to the drawing board google, it is YOUR job to find the good sites, it is YOUR job to build an algo that works - WITHOUT IMPACTING THE INTERNET ECOSTRUCTURE.
Maybe a change of personnel, some fresh blood? A fresh perspective is what is needed?
Panda / Penguin has unleashed an almighty torrent of spam on the internet. I've been building websites since 1994, even in the days of AV and Yahoo it was never this bad. Good sites penalised for 'god knows what', spammers delightfully saying on forums 'go brand or go blackhat, and if you go blackhat go HARD - churn and burn'. They are making a fortune atm.
We shouldn't be in a situation where webmasters feel under seige, we have google one side limiting what we can do with our own sites. On the other side we have blackhats and spammers targeting our sites with crud that we have no idea what to do about. In the middle we're just trying to build businesses around a good service.
Google created this situation making negative SEO possible and rife, from my small corner of the internet it's getting worse month on month.
Bing doesn't have this trouble, they don't have 500 updates a year, don't dictate to webmasters what they can and cannot do beyond the obvious, and still provide an excellent service.
Google could learn a lot from Bing. There was a time when there were rumours that Bing copied google's results. Lol, they wouldn't touch the G results with a bargepole now, Bings are far better. What happened google? Get a grip or prepare to be ousted by the people who REALLY DO run the internet, the millions of decent webmasters and users who make the internet such a wonderful, varied, vibrant place.