Do not be overly afraid to trade a few links with related sites. Especially if it's in-content link swapping. If I blog about Digital Point, and then post on digital point about my blog, then that, is not all that natural, but then, it's not unnatural either. While such linking may not do a great deal as far as Search Engines are concerned, it can be a potential boon for traffic. If you feel that I am wrong in my above point, and that it can some how harm a site to trade links at all, then be sure you have no out-bound links, as you never know when the place you find worthy of naturally link to may find your site equally worthy. Then again, don't go overboard on the trading either....
Folks may start to re consider dynamic linking again just for the traffic value and not the seo value. From what this means larger "static linking" campaigns will be just a useless as dynamic. But either way trading links can open the door to traffic for a hit to your page from another site no matter what the serps think.
I don't see how you can devalue a site with too many inbound links. If you have a popular site there is no way to can manually keep up with putting as many outbound links as you get in.
So google has a problem with you trying to make your site popular. What's next. People cannot promote their sites. They can only just put them up and leave them there.
That would be like saying don't advertise your site. If you do you are only hurting your site. Or am I misunderstanding this?
Another white hat post. Just to remind you people, some websites get no.1 spot in very competitive keywords with three way link exchanges (where cleverly they make the links look very natural). If you only depend on natural back links with anchor text "click here" or your domain name plus article submission, you won't be able to beat your competitors in competitive keywords. So I think link exchange is still important, especially for those who know the way to do it
Any site that sells links is another competitor of the google adsense program, just their way to try and dominate the market. In short you are right. Google seems to want the text content rich sites for their indexing so their surfers do not have to go very far to find what they're looking for.