My understanding is that if you have a RAW file and the sharpening is set to ZERO you get the best image quality because you have not changed the original raw data and that should be exactly the same sharpness that the sensor reads through the lens.
Then if you add any sharpening at all you change the original sharpness by sharpening it more than was originally captured and thus you lose image quality.
My understanding is different. If your lens has an MTF of 1 all the way to the corners (theoretically perfect) it will cast onto the sensor an image that is as "sharp" as the scene being photographed. If you have a real lens it will make an image that is less "sharp" and therefore of lower image quality. Also, as neuro points out, the sensor and its AA filter reduce the image quality more by taking away even more "sharpness."
The mathematical sharpening algorithm tries to improve the image quality by correcting these flaws introduced by the optical and electronic systems. As with any such post processing correction it can be over or under done. But even for L glass lenses some amount of correction seems to help.
Of course, if you prefer a slightly unsharp soft focus kind of look, you will like the loss of sharpness caused by the camera and not like the corrected look. But that does not seem to be the prevailing preference.