Are 301s a bad idea? Why or when should you use them? Does Google penalize you if you get trigger happy and 301 everything in sight? Two WebmasterWorld threads ask the same questions.
In the first thread, a forum member is a bit peeved at his competition because he has a bunch of domains that 301 to a main site -- but each one looks pretty spammy especially since they appear to be "monopoliz[ing] the area." Is this a good idea?
In general, people do that. Trademark concerns, for example, drive folks to buy domains that may infringe on trademarks but naturally 301 those domains to their main site. Is that bad? Nope. In fact, it's better to 301 than to park the domain!
But is there a such thing as too many 301s? Perhaps not. Keywords in a domain name don't necessarily boost rankings, so if you're a site like Search Engine Roundtable and created a bunch of spin-off domain names that had good keywords, that doesn't mean you'll rank better.
From experience, members have not seen any penalties from excessive 301s, but Matt Cutts gave a warning once:
With the "abuse" potential of 301s this is a question I've often wondered about and found remarkably little info on, the only semi-official mention on it was a remark by MC saying it could be risky to have off-topic anchor text pointing to a site.
That makes sense.
There's just one word of advice when you redirect: if you do implement 301s (at least internally), make sure to update your sitemap, or the Google Webmaster Tools might inform you that you have too many redirects.
Related discussion: Can Too Many 301 Redirects Hurt Your SEO Efforts?