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My question is: Is this dangerous? Could it lead to potential problems with Google? Could this be abused by others to create duplicate content issues?
In many cases, wild-card subdomains are set up as the default hosting account configuration. But if not, it's actually not a bad idea to implement wild-card subdomains and redirect them all to the canonical domain. This allows you to configure your DNS server --which is authoritative for your entire domain-- to prevent others playing 'games' by defining one or more of your subdomains on DNS servers that they control or have compromised.