Yes. It's certainly a slippery slope but we can navigate it intelligently (as we do with defamation) and it's worth it to keep people from building link farms pointing to a competitor so that Google will punish them.
The solution isn't to make linking illegal - it's for Google to stop the penalizing and just simply not count the links they don't like. Penalize for on-site stuff, just ignore the off site stuff.
I realize they want to take away the incentive for spammers, but let's shift the burden of finding a better way to do that onto them instead of changing the laws about how the web works.
They will just =not count= more stuff - same as negative counting.
Overall the entire ranking business depending on external links instead of the actual content will always be exploitable to some degree.
