I disagree with your disagreement. Rebasing/squashing can really help clean up the development history and actually make it a ton more useful as a historical reference.

Like all things in programming, discretion is key and obviously it can be overdone, but anecdotally, I've found that it makes the history so much more useful to lump related changesets together.

In short, categoricals like "don't do it, you'll lose history" don't really hold much water for me. Of course it can be over done. But done right, it really is a great feature of git and a god-send on larger projects (check out the actual git source log for an example).