People increasingly use social sites and sites that are built by user contributions. There are so many great things that resulted from this (one of the popular reference sources is Wikipedia which is built by millions of users). However, there are some serious consequences caused by the introduction of "nofollow" that many people are not aware of.
Internet is rapidly going thru a PageRank concentration process (equivalent to the real world capitalization where few people own most capital).
PageRank is a very important factor that Google uses in determining where your site will rank when someone searches for relevant words. (why care about Google? 70% of searches are done with Google.) PageRank roughly tells how many other sites link to yours, and therefore how "important" your site is.
How is this PageRank capitalization happening?
Each site and blog owner is contributing to this unknowingly and voluntarily.
Do any of these look familiar?
Most blogs and sites have at least few of these on almost every single page. Not a single one of these buttons has "nofollow", meaning that people give a very good chunk of their site's importance to these social sites (hint: importance that you give to these buttons is importance taken away from other internal links on your site).
Most of the social sites however, do have "nofollow" by default on all external links (also the links pointing back to people's sites after users link to them for being good).
Conclusion: people give them a lot of credit on almost every page, while these sites give nothing in return.
For example, bookmark your new site "example123.com" at "stumbleupon.com". If you google for "example123", stumbleupon.com page about it (with no content but the link and title) will be on top, while your site (with actual content) that you searched for will be below. Imagine what effect this PageRank capitalization has when you search for things other than your domain name!
Start giving priority to sites that are SEO-friendly (IM Faceplate, APSense Business Network, Sokule, ... to name just a few of my favorites) and / or monetize Your links posted to the ones having "nofollow" by using free services like AdFly and LinkBucks .
The easiest way to find out whether Your links are "nofollow" or not on a particular site is by using Firefox + SearchStatus add-on with "Highlight Nofollow Links" function turned ON.