It's no myth.
I didn't say lack of nofollows cause problems. I said they can.
Ranking proves nothing because if all your competition does exactly what you do they're in the same boat as you are.
Looking at SERPs will tell you very little about SEO.
PageRank is also not the only ranking factor. The primary reason for using nofollow is to get pages to stick in the main index. If you can pull that off without using nofollow, so much the better.