I dunno, I think it's a good thing; definitely better than adding an SUV to the range. The first 928 was sort of a breakthrough car for Porsche--it was the first time they offered a real Porsche that wasn't from the 911 mold, (I know I know, the VW-based 914 and 924 had already been introduced, which is why I say "
real Porsche".)
I don't think a sporty sedan dilutes the Porsche image at all, and this one looks gorgeous IMO. If you're talking about screwing up Porsche's enviable high-performance image and heritage, I'd say the Cayenne is the vehicle that makes least sense for Porsche.
BTW, the biggest piece of crap car I've ever owned bar-none was my 1987 Porsche 944S. After I got rid of it, I did some math and figured out that the car had either been in the repair shop or was otherwise disabled for an average of about 1 week for every month I owned it.

lasma: