It still is fine to use index pages in subdirectories and subdomains its just that Google seems to see these as being new sites for the purposes of its aging algorithm. Just means they will now take longer to appear in Google search results. If they are OLD pages that have been there a while and Google knows about them then no issues... except see below.
A radical change in page content has the same effect. I had a PR5 non-adult adwords site which despite the traffic was not making me too much money. In November I gave the site a major makeover, kept the keys the same, the links the same, the page scanned the same for keyword density and relevance however the graphics and written content did totally change on each page.
Uploaded the site and three days later saw it go from PR6 and in the top 5 searches to unlisted! At first I thought I had been banned but typing in the URL brought up the site and description and a cached page. Gradually over the last few weeks I have seen a trickle of SE traffic from Google. This compares to quite a flood from MSN since I changed it.
This is what caused me to consult my Guru (see previous post). He said I should have changed my sub pages at the rate of one a week and my index page a little bit at a time over the same sort of period. He said that an index page missing on two consecutive googlebot runs could reset aging as well, but I have no experience of that.
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