The latest Google penguin update penalizes sites that "over optimized". I have one website which has suffered from this update, although I don't consider going much SEO, except by posting my articles to Facebook and Twitter. That site (a blog) use the nofollow attributes for most outbound links, and I wonder if it could be the reason it has been punished. On another note, I've noticed that for some keywords, RSS aggregators do better than the original articles, hopefully Google will improve this update over time.
From what i understood, the nofollow attribute doesn't matter anymore. Regarding the rss aggregators, i heard the same thing, it's better than the original.
i guess too much of anything will eventually lead to something not good. anyway, the nofollow links can also benefit your site if used correctly.