I don't know about the wheels being damaged, but I did notice a large number of hairline scratches in the clearcoat after taking my car through a car wash. After a good waxing they all went away. I now only hand wash the car.
In my opinion it depends on what type of car wash. Here in Canada we have touchless car washes, although not great when the car is "really" dirty they do a good job when you ahave the dirty haze over them.
I usually avoid touch car washes at all costs for the same reason mpoczbut said.
I used to hand wash all of my vehicles until I hurt my shoulder and my back. Now I use a local brushless car wash. Doesn't seem to be an issue with scratches, but you are correct that they don't clean the wheels well. I usually preclean those first.