Aren't we only suppose to nofollow links we do not trust and are in bad neighbourhoods? (or are areas for members etc. where a search engine cannot go)
In most cases if the link is good enough for you to put on your site to let visitors click on it, it shouldn't be labelled nofollow. IMO nofollowing links is telling your visitors one thing (click here to visit the site) while you tell Google another with a secret handshake that the visitor does not see (don't visit this site because we do not trust it). Why put the outbound link there in the first place if you do not trust it?
Most other reasons for using page rank just deal with gaming Search Engines. I understand when people nofollow user generated content links but even there they should really approve each message before it goes online if you don't trust your users.
IMO nofollow is the main cause for the brand dominance we see now in the Google SERPS. A lot of webmaster seems to nofollow all links just to be on the safe side. This results in smaller sites not getting the recognition they deserve. Brands still get it because they have a greater chance of being linked by the major publications in their articles etc. which usually are not nofollow.