If I understand how viscous damping works, resistance increases with velocity of movement. As an example, if you put your hand in water and move it very slowly, there is very little resistance to movement. But, try to move it fast, and the resistance increases dramatically. When a tone arm has to make large lateral movements (e.g., off center record) , it is forced to move at a much higher velocity than its normal movement, which is quite slow. I don't know if this added resistance is enough to create excessive strain on the cantilever or the suspension, but, I would guess that fluid damping is not a help in these situations.
But, some resistance to movement laterally might be a help when it comes to bass response. Deep bass is often cut monophonically so that all of the movement is laterally. If the movement is large enough, the whole arm will move instead of the arm being held steady (stead would mean all of the movement of the cantilever is translated into signal). Thus, movement of the arm to follow the groove results in reduced bass response. If damping helps to resist such movement, bass response would be more powerful and faithful to the signal on the record. The Moerch DP9 anisotropic arm does this by increasing the effective mass of the arm in the lateral plane of movement; I bet damping would provide similar resistance as well.
