Choose words carefully:

Surely you mean "if you buy paid links and Google will prevent any value from coming from them [when they find them] and that's the "harm" you speak of... Not Google finds paid links so it kills off all non-paid links as well like your DMOZ Link and Chamber of Commerce link and Your State association dot.gov links... Surely you're in error there? Or did you simply mis-speak?

Losing something you're not suppose to have isn't harm [IMHO]... You stole you neighbor's car - did the police 'harm you' by taking it away from you? You borrowed the boss's wife... when he takes her back did that actually 'harm you'?

I agree that if you invest in paid links those links can be made "worthless"... and that is what Google said but I disagree that Google will intentionally HARM all the good links you got (IF ANY).just to prove a point.

Be that as it may - get Matt Cutts or Google to admit to overkill [doing evil] or show irrefutable proof that Google said [paraphrasing] DMOZ links are great but if you buy paid links we'll kill off your non-paid ones as well.

It's far better to say "if you want sustainable ranks use ONLY these link types and AVOID these... rather than loosely defined "inbound links" or even paid links... Yahoo is a "paid link" and a Yahoo inbound link will NEVER HARM, HURT, or be DEVALUED (unless Yahoo is bought out by Microsoft).