I don't have anything against students taking a Gap Year (although I do find it odd that it is necessary to have a rest after A-level - is the three months off not enough?)
What I do think is a problem is that Gap Years are almost never ever constructive in any way. Some people simply find regular jobs and work for a year - unless they are hoarding all the earnings, I don't see the sense in this, and with the current funding model, is probably counter-productive.
A lot of students flit off around the world "to experience the world", but what they actually do is go to Thailand and Australia, and hang around with other British Gap students.
Some try do-gooding -voluntary work and such like. Laudable aims, but the manner in which these are structured has become so jejune that it is almost like an optional University module.
All in, I think they are a fantastic waste of time and money and serve no useful purpose. But I wouldn't really say that they are causing any harm per se.