If you follow web standards, your code will be not be bloated [on average I notice about 2/3 to 1/2 less code when switching from non valid html 4 to xhtml 1 strict] this alone will help with
seo. The search engines do index all your code, and google does stop at the 100k mark. You'll have less chance of any freaky code that confuses the spider or algorithm. w3's validators have caught bad code snippets that I never would have caught otherwise. Semantic mark up, which of course the search engines love.
I think there are loads of
seo reasons to strive for valid code. But I do agree that the other reasons to have valid code out weight the
seo benefits.