@neologist,
To the extent that it discourages free expression of thought and opinion, it very definitely harms the nation. It also harms the nation when it inculcates children in public schools with ideas and attitudes that are not settled and rightly subject to debate.
It is certainly not as harmful as cutting someone's nose off or burning them at the stake, but then I don't consider brutal enforcement of any orthodoxy as an expression of political correctness.
The sort of political correctness (and the term has not been randomly chosen) that tries to prevent people from calling a lunch sack a "brown bag" or results in the 12 month suspension without pay of a Pennsylvania teacher's aide for wearing a cross necklace in school has not been going on for centuries or decades, and even if it were, that would hardly be a reason accept it now. A whole lot of nasty practices were in place for a whole lot of years, but our society has matured and done away with them.
Almost all of these PC proscriptions are based on a ridiculous hypersensitivity to offense which actually encourages people to take offense at the silliest of things. Is there a black or brown person in America who is offended because a brown paper bag is called (Heaven forbid!) a "brown bag?" If there is (and sadly I wouldn't be surprised to find there is) I would bet dollars to donuts that they have been taught to express outrage over the not only "micro-aggressions" but illusory ones as well.
It is harmful to the nation because it can reduce the level of discourse to the infantile or simply idiotic, and because it misdirects attention and resources far better devoted elsewhere.
In and of itself, and at its current level, it isn't shredding the fabric of the nation but it certainly is applying unnecessary stress.