The good news is, Google doesn't care how many no-follow links you have on your website.
The bad news is, you should care, as no-follows may soon bleed PR.
He isn't very clear on how Google handles over-optimization, but seems to hint that keyword stuffing may annoy more than your audience and competitors.
We know manual checks often penalize Made For Adsense (MFA) sites, so the decision not to over-optimize should be a no-brainer anyway.
Here's the video: