My understanding is that there are a few reasons why it can be a bad idea. First of all, prior art seems to be taken more seriously during the re-examinations that happen during lawsuits. If the prior art is presented beforehand and the patent is granted anyway, then that avenue is closed off. In addition, it gives the patent filer more of a chance to tweak their patent to try to work around the prior art and re-file it (often several times) until it gets granted. So you want to only present prior art during the phase of examination during which it's taken the most seriously and when the patent filer doesn't have an opportunity to game the process by refiling over and over again, which usually means waiting until it comes to trial.

Secondly, patent attorneys don't like their clients doing any sort of search of/reading of any patents that could potentially affect their work. If you're found to have knowingly violated a patent, the damages are far greater than if you did it unknowingly. Submitting prior art to try to get a patent thrown out before it's granted would necessarily require researching and reading up on those very patents, so if the patent didn't get thrown out and you were eventually sued for infringing it, you'd be in much, much bigger trouble. Presumably the people who have the incentive and knowledge to bring up that prior art are likely to be involved in the same segment of the industry, which puts them in an awkward position: do you try to get the patent thrown out ahead of time, and be in serious trouble if you fail, or do you hope you don't end up at trial but keep the prior art in your back pocket in case you do?

Perhaps big companies could have a dedicated legal arm to research and challenge such patents at arms-length from their developers and/or keep their developers aware of potential minefields, but for smaller companies you'd be better off avoiding patent searches or research altogether.

That's fairly paradoxical given that patents are supposed to further innovation by giving people an incentive to disclose their inventions, but that's what the software patenting world has come to . . .