I think it's pretty clear that people that have their seats too low don't ride all that much. I have never heard of having your seat too low causing knee pain, but then again having it so low that you can touch the ground on a normal upright bike is outside the norm, at least among people who ride a lot. My suggestion is that competitive cyclists probably need the most comfortable position they can get, certainly this is true of seat height.
If touching the ground is really important to you, then you might want to look into a recumbent or a crank forward bike. There are many options of crank forward bikes, Rans invented them, but Trek and Electra offer them as well
If you ride very much with a proper seat height, touching the ground really becomes a non-issue. Can't remember the last time it was a problem for me.