I've had nothing but good outcome for some of my newer launched sites using web directories to get their 'foot in the door.'
Directory traffic depends on the directory popularity and where you are listed in this directory and yes some directories can let you gain huge targeted traffic. Page rank would never decrease if you submit to directories but still as other mentioned building huge amount of links whether its from directories or not in a short time, may get you banned in google as they consider it as a spam.
Banned for too many links in a short time? I don't think so. Unless you don't get like half million backlinks (link injections?) and get reported by hundreds of webmasters What do you mean by "huge amount"? 100-1000-100.00-100.000-1.000.000 / day?