That's the thought behind Darren Slatten's post on an SEOMoz and it's a valid point to consider. If an individual is so good at what they do that they are constantly turning down new clients anyway, does it matter if the #2 result for your name says, Darren Slatten Sucks - Don't Ever Hire Him?
Darren's point is that as long as you come through for your clients, you will always be in demand and they will dismiss any negative information they find while searching for you. In essence, Darren is saying that word of mouth and a referral from a trusted friend holds more weight than the Internet. Assuming business is great and will stay that way, I'd say he's right.
The trouble is, at some point, someday, business may not be as plentiful and easy to come by. SEO is a huge topic and thousands of websites are clamoring for good people to help them rank higher in the search engines - and there aren't enough people who can deliver real results to go around. But at some point, either the need for SEO help will diminish or the number of good SEO experts will grow, making it more difficult to rely entirely on referrals to build a business. That's when your online reputation could start to hurt you rather than help.
You may not need Google now, but do you really want to risk the chance of losing business when you need it 5 or 10 years from now? Seems like the quintessential "burning of bridges" to me. Darren's got cajones - I'll give him that.
Tony Adam, in a rebuttal post, has some good points.
Online reputation also becomes an important consideration for family businesses. Anyone who has plans of passing their company on to the next generation has an obligation to them as well to ensure they benefit from a solid reputation we have left behind for them online. We die, but the bits and bytes we leave behind never do.
Update: Darren was right - his post is ranking at #2 on Google. Yikes!