Selected answers from the Dumb SEO Questions G+ community.
LionLeaf, LLC: They've got value for users, but you can give your self a bit of a headache around duplicate content with a lot of tags, because you'll often have all the same posts appearing in the same order on different tag pages. ; ;
The example you've given above looks pretty spammy. ;Each of those pages would end up being "optimised" for a very similar term, which opens you up to issues with Google Panda.
Better to use the tags for users, but block them via robots.txt for search engines.
Tim Capper: Agreed .... tags are for users, not for search engines.
Dimitri Prosvirin: +1 to first comment. Few tags per post is no problem, just keep it simple.
Justin Y: I agree but just to be safe I would convert the tags widget to default to nofollow links because they're for the user and then I would limit the tags from 3-5 tags per post max. Plus noindex like + mentioned, avoid the dupes in SERPs.