One of my many search and social conspiracy theories (of which often turn out to be true) is that the Penguin algorithm update on April 24, 2012, was actually two updates. There was a public update that went after low-quality links, splogs, and other SEO linking tactics. This sent shockwaves through the search engine optimization world. Most agencies had to change some of their practices. Some closed down altogether. It was the SEOpocalypse for many in the industry.
The idea of the NoFollow attribute on links was to help prevent spam from appearing on user generated content sites, particularly Wikipedia. It was intended as a way to tell Google (and eventually all major search engines) that a link was not supposed to transfer any “link juice” to the recipient of the link. In essence, it was designed to stop SEO spammers from trying to insert their links where they didn’t belong for the sake of improved rankings.