What in the world? I find this very hard to believe because it seems to be very legitimate use of a free stats counter that many do. In fact, doesnt Google offer a search function that links back to Google?

http://www.theage.com.au/news/biztech/mo...74688.html

I really dont feel, that sites getting backlinks from Free stats counter are hurted.. because if you see statcounter.com, they have PR10 and has really good rankings in search engine...
If you try to spam a website by purchasing backlinks they it may hurt..

now one more good example is of Joomla or any open source software..they have their text link inserted in every page but that doesn't hurt because they have copyright of the software.. so according to me it shouldn't hurt in anyway.

Oh, so they are (theoretically) penalizing the distributor of the stat counter -- not the users of the stat counter.

Yeah ! i use Statcounter to pull in a bit of AdSense revenue . The statcounter link is not a blind link. A "blind link" is not a link that does not appear on the foreground of your webpage .
So, adding Statcounter shouldn't penalize you .