There was a recent study in Japan that showed coffee drinkers have a much lower chance of bowel cancer that non-drinkers after other factors had been removed. The study guessed that caffeine was the reason, but as decaff is virtually unheard on in Japan, it was hard to test.
I've also read that caffeine cream is being used to treat skin cancers and they've got as far as human trials.
Yes, a large boost of caffeine when you've not built up a tolerance to it is going to feel bad. If you get a tonne of it in one go (like 8 espressos or something) it you can go delirious. If you get more, it'll kill you. So what? The effects of alcohol are far worse.
I used to drink double spoonful instant coffees soon after I graduated because I couldn't cope with 10 hour days of proper work. 4-5 in a day. My sleep was a bit poor, but not terrible. Stomach didn't like the abuse though and I always had really sweaty hands. I switched to tea instead and now I'm on 3-4 cups a day and I don't start until I'm at work. Now if I go out and get a large coffee at the coffee shop at lunch, when combined with my tea intake, it's enough to make my head throb and I can feel a bit odd. It's all about tolerances.
A guy at work will easily go through 8 cups (and +10 on bad days) of instant coffee at work and drinks at home too. He's fine.
I have tried going completely without caffeine for a few weeks at a time, normally during the summer when I switch to water/squash. After a few days I feel normal and I don't crave the caffeine. But if I've had a few hard days and I'm feeling run down, I'll have a cup as a pick-me-up... Next day I'll have two cups. After a week I'm back to 3-4 again.
At the moment I am a little dependant, I need a cup or two at weekends or I feel really run down and grumpy, probably not a good sign, but if my workmate is still alive, I'm not too bothered.