Listen to Karon, she says good things.
I'll back up her in saying that I see no harm in the keyword tag. I see no benefit to it, but I don't see any harm either.
I think the types of competitors that decide which phrases to target by checking out other people's sites are not likely to be skilled enough to give you serious competition anyway. If a company isn't doing their own independent keyword research, it's a sign that they don't really know how to do proper search marketing.
Also, I seem to recall seeing the number five up there...
I'll just throw in my two cents that I don't ever suggest actively optimizing a page for more than say two phrases. I just don't think that you can effectively target more phrases than that per page.
That said, by writing good copy and having good link structure and site structure, each page will attract traffic for WAY MORE than two phrases. That's because you'll have tons of little variations that might only draw one or two visitors to the site, but those start to add up. That's part of why natural language is so important.
As Karon says, you can optimize your copy for certain phrases, but if you don't keep it natural and flowing and have it foremost aimed at the readers, you're not only going to miss out on converting visitors to buyers, you're also going to miss out on that incidental traffic that really starts to add up.