If you have seen what happens to the crank end when it is the victim of insufficient harmonic dampening then you might just reconsider that. I have just recently seen the result on a Chrysler 6 (internally balanced race engine) and the pulley was actually welded to the crank from insufficient damping. The cure? They fitted a decent unit from Romac. They did however concentrate on reducing the rotational mass within the engine (ie knife edge the counterweights).
When it comes to externally balanced engines (as you mention V8s etc) It is generally only "big block" engines that require external balancing simply due to the amount of weight in the piston rod assembly, that they did not have sufficient room inside the engine to balance it.
The rest of what you said seems to make sense though - albeit that it smacks of a crank pulley manufacturer advertisement.