I see nothing wrong with zero down loans. Most of the time the benefits of home ownership still outweigh renting for those borrowers (I don't want to get into the discussion of whether you really own when it's mortgaged-that's a whole different topic).
Where it becomes dangerous is when you couple zero-down with interest only payments, short period ARMs, overpriced markets, and borrowers with marginal credit.
"Where it becomes dangerous is when you couple zero-down with interest only payments, short period ARMs, overpriced markets, and borrowers with marginal credit."
Social engineering-driven lending, in other words.