Its terrible because a lot of beginners think that is pretty much all there is to composition and will stop thinking and learning, let alone he fact that for a vast majority of occasions it simply isn't that great. Too many landscape shots that have something like 1/3rd of the frame as boring sky etc.
Composition is a far more complex subject. Such 'rules' have greatly limited peoples abilities.
EDIT: here is just one article on the subject:
http://petapixel.com/2016/01/30/10-myths-about-the-rule-of-thirds/
Its very damaging, I have wasted years of my photography life by following that rule, and I'm spending years unlearning it and trying to understand the structure of the world I see through the viewfinder and how the mind will interpret shapes, geometry, contrast, color, patterns, balance, space.