Google knows that at certain points in time people figure out how to rank sites quite easily and so they tend to do these algo things to confuse people and force you to do something different. Honestly I think it is all speculation and good just randomly does whatever they want. The reason I say this is because you can still see some garbage over optimized sites ranking great and some great quality sites gone. Doesn't make any sense at all. The one thing I did get was to simply make your sites natural and focus on your users and not the search engine itself but even doing this does not guarantee you anything just beware.
yes this thread is a good question. An seo buddy of mine sent me the same Q and of course its aimed at scaring the seo people and companies that go black hat. But funny enough it reads like you should not optimise your site for on page seo. Funny in that without precise titles etc, google wont know how to properly categorise your site for searchers and the results will be crud. Google look like they are just running a scare campaign to be seen to be doing the right thing as a diligent company. Good luck with that PR peeps!
I have read this on some forums that says over search engine optimizing can affect our website in penality. This is a part of Google panda search algorithm.