I have heard from atleast 2 sports orthos that squatting is bad for you knees. I guess it shouldn't matter when you are doing it the right way with adequate recovery period but nevertheless its easy to screw up your joints .
One even said that squatting is a very unnatural moment for human body and is best to avoid it .
For what type of squats, and what does bad for your knees mean? Risk of acute injury? Risk of longterm damage? Are we talking half squats or full squats? Sets of 6 reps with heavy weight, or sets of 100 reps with light weight? With feet flat on the floor, or on an incline (with heels slightly higher than feet)? Does the damage occur at any weight, or at some threshold? What about jumpies?
Saying squats are bad for your knees doesn't really mean anything, and I doubt your orthos would actually know offhand. If you have a question, go look up the relevant studies from the academic literature, and then ask if you don't understand something.
You should read Starting Strength, by Rippetoe and Kilgore. It goes into a lot of detail on correct form in performing barbell squats, and it also goes into detail about what causes knee injuries. Short version: a full deep squat, with the top of the thigh parallel to the floor, is fine. Partial and incorrect squats are bad.
I think you're getting into the zone of training philosophy at this point (ie: no right answer, YMMV etc). Absolutely squats by definition are not bad for you, but it's very easy to hurt your knees (and your back) doing them if you aren't careful.