At some level it seems largely self-evident that large inequality (and for that matter widening inequality) is bad for the broader economy. But that doesn't mean that no inequality is good. It seems like there should be an optimum, though I've no idea where it would be or whether it would correlate to any other factors.
I'm pretty liberal in a lot of ways, but if we lived in a society where everyone was perfectly equal (like in The Dispossessed) then we would have little incentive for anyone to do their best. I don't begrudge success, I just don't think that anyone can possibly be worth $1 billion while others starve.
As I see it the solution is pretty simple: much more progressive taxation, especially for very high income individuals, combined with more generous social insurance programs that improve the baseline living conditions for the poorest among us. People that can't or simply don't want to work shouldn't own mansions but they shouldn't starve on the streets either.
We are wealthy enough as a nation that we should be able to provide shelter with basic amenities, food, clothing, (public) transportation, and medical care to everyone. A little work can afford a few low end luxuries (TV, alcohol, PS3, nicer furniture, car), and major innovation/development would still allow someone to buy a redicu-house and a few Ferrari/Hummers.