The main reasons why you don't want to get too high of a PSU is because you're paying more money for the unit up front, and furthermore, PSU's efficiency is based off of a bell curve. You get too far off the sweet spot (most are around 80% load), then the PSU isn't as efficient and it costs more in the electrical bill to run the computer. (you may not even notice the difference on your bill, but there is a difference...)
For example, a similar quality 400W PSU will run a 300W load more efficiently than the same quality 800W PSU. Again, you may be talking about a few bucks a month, but there is a difference.
As for "overwatting" your components, you can't do that. But, if you hook the components up to the wrong connections, or you've got stuff that is drawing too much on the same rail you can overamp/underamp the components and that is where some damage can occur.