Q: is 'never sleep' bad for the computer?

Not really as long as it is always plugged into a ac source and it would be best to have the ac adapter plugged into a UPS just in case the ac power failed the UPS would supply power to it and once that ran out the internal battery would take over.

Setting the screen to stay on 24/7 would be bad for the life span of the screen. But never letting the system sleep wouldn't hurt it at all.

Never sleeping depends on the room temperature, which will affect how hot the hardware will get. If it's really hot, you will want to let it sleep to cool down. Also, running 24/7 means the fans or fan will never stop. This will mean introducing more dust into the computer, as well as possibly burning up the fan motors sooner than would be the case otherwise.

Another aspect of this is if you don't have "Put the hard disk(s) to sleep when possible" in Sys Prefs>Energy Saver, that will mean the drive will be running 24/7. I don't have that checked because I think it puts more stress on the drive to have it cycling off and on constantly. However, I do sleep the computer when not in use. Therefore, my drive, although it isn't sleeping when the computer is being used, isn't running 24/7. Some people think it's good or at least OK to run the drive 24/7, but there is no evidence it is, and although I can't support this with anything more than personal preference, I think running the drive 24/7 can't be too great for it.

A lot of this is just guesswork and personal experience and preferences.

I have a G4 iMac that has been running 24/7 since 2005 and an Intel iMac running 24/7 since 2009 (they are consumer Macs being used as servers). The displays are set to turn off after 5 minutes and drives to never sleep. Neither has required service...knock on wood.

I have had my computers set to "never sleep" for extended periods at different times with no ill affect. A couple of cautions I would add from my own experience is have a good UPS and set your computer not to restart after a power failure. Set your display to sleep, it will not affect your computer sleeping and keeps the computer a bit cooler and saves wear and tear on the display. A regular restart of the computer will help also, it doesn't need to be shut down long, but do a full shut down and then restart (not clicking "Restart" from the menu) every couple of weeks. Some will say it doesn't make a difference, but it seemed to me that it did and didn't take more than a minute longer.