If by “bad” you mean “cause it to overheat, dramatically shorten the battery life, possibly melt solder joints, and maybe even cause injury and/or ignite”, then yes.
While it’s true that the computer will shut down at a certain temperature, it’s also true that long-term exposure to a low-level overheat can cause as much damage as the sort of temperatures that the thermal cutoffs are designed to protect from. Put another way, holding your hand in a pot of boiling water won’t hurt you as bad as a welding torch, but it will still hurt.
Also note that Lithium batteries do not like high temperatures. The hotter your laptop runs, the warmer the battery gets. The warmer the battery gets, the quicker it will die permanently. Normally, they lose ~15% of their capacity per year; at higher temps (like those next to an overheating CPU) it’s often double that (-30%/yr).
Thing is, the vents on a properly designed laptop like my Toshiba are someplace where they really cannot be blocked; the left edge (on the side, not the bottom) and in the center of the bottom between my thighs. And for those that are not as well-designed, there are cooling trays.
@CWOTUS I think it’s because they are stupid. It would seem to me that lacking edge-mounted vents borders on moronic unless you somehow design in alternative cooling like Apple did by using the entire aluminum case as a heatsink or use a low-powered CPU that barely generates any heat anyways.
@bongo I could be wrong, but I think that may have started back in the Pentium III days when, due to a combination of less evolved technology and the occasional use of desktop CPUs in portable systems, “laptops” ran at temperatures that would literally scorch flesh. As class action lawsuits for injuries tend to be pricey, it was cheaper for computer makers to change the name, advise against actual lap-based use, then deny responsibility for using the product in unintended ways than it was to just keep on calling them “laptops”.