Natural doesn't mean okay or good, though. (Cyanide and Herpes are natural, too!) You are correct, small populations of people don't have a choice but to "linebreed" and because of that you hear the news stories of the small colonies of people that are riddled with birth defects and genetic problems from it. There was a recent one about that polygamist guy in Kentucky and his group of wives starting to see problems, I will see if I can find it later. People use it in animals to strengthen certain traits without considering the large number of problems that can come with it.
Edit to add: Here's a brief article about it in the Amish community, since they do not allow marriage outside of the Amish faith:
http://www.freerepublic.com/focus/f-.../1421049/posts
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