I think that Google penalizes for over linking with internal links. I used list of commercial keywords on the footer at every page. Then traffic goes down to almost nothing. These links was not the same but there were lots of them. It took me about 6 months to fix this and get back. What I did: 1) Removed those links 2) Replaced some of the footer links from footer to a content 3) Some of the links replaced to the right-side bar and got some real traffic Have you seen this effect also?
I guess it depents on the amount of internal links you have on each page. If it becomes spammy I am sure Google will penalize you but if it fits your content I don't see any problem with it.