You are a marketer who is running a big physical sign in real life near some intersection, selling widgets. There are always 10 other signs there. There is one very overworked official who checks the signs to make sure they aren't overtly bad for people looking at them.
You notice that two of the signs competing with your client blatantly say that they sell widgets, that their widgets cure cancer, and that other cancer treatments are shams. You know that this sign will mislead or annoy people at the very least, and also that the officials who decide what signs stay up would probably removed it if they look closer.
It just so happens that you know that the overworked official will look closer at signs if you put a red flag on them. Putting a red flag on a "good" sign will make the official look closer but not do anything about it. But if the official notices the "bad" signs in question, he will probably take them down.
You do it self servingly, of course, but if the signs weren't on the "bad" side in the first place, then the official wouldn't take it down. It's arguable that its not immoral to flag those signs - the flag just tells the overworked official algorithm to look closer and a little more stringently.
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To be clear: I don't do negative SEO or anything not 100% white hat in the little SEO work I do. But applying negative SEO to an otherwise "good website" is like putting weight concrete on the base of an already huge pillar. It can really only hurt borderline sites, as defined by Google's rules.