Hi Bailey
This is initially related to tagging in general
I can't give you a specific reason because it it many ways defies logic to a certain extent.
Technorati has always ranked well for duplicate content. There is no unique content on the site.
If you check the backlinks for Robert Scobles blog on Wordpress, last time I looked his 4th most powerful incoming link was for the Wordpress.com tag page on dell.
Why would a tag page on my blog which is just a list of the tags at the top of a post (I need to make my excerpts longer) rank first Worldwide on Google, on an almost brand new domain? It is 6 weeks old, some redirecting going on, but that still doesn't justify the result.
I just checked the results again, I actually have the top 2 results now for wordpress training and the first is my tag page for "testing". It has almost the same content as the tag page for for lots of other terms, so I have no idea why they chose that one to show currently.
The second result is new over the last few days, and I can't work out why they are showing that page, and not my posts with Wordpress Tutorials in them. I will probably help Google a little soon and give them a post with the right title to lock the keyword down a little.
wordpress training - Google Search
It is typical for a new site to be sandboxed after 3 days. It looks like I have avoided that maybe with the redirect.
Duplicate content on the same domain also tends to get added to supplemental results, but they still seem to add some weighting.
Tag Clouds are a navigation element that is designed for users to find content.
I don't think Google morally would implement a penalty for anything designed to help people find things.
Tag clouds can even end up automatically creating lots of tiny almost invisible links, but I have never heard of people being being sent letters to clean up their act.
My conspiracy theory is that Google like tagging because it helps them with their LSI calculations. Maybe they actually use the data themselves as a first stage in the calculations, or as some kind of comparison.
I would suggest always using /tag/keyword and /tags/ or /tag-cloud/ for your tag cloud.
If Google wanted to wipe out all that duplicate content they could, in a flash, but they don't seem to be that way inclined.