Can aiming for a high Atar in itself be harmful in the sense that if you don't achieve what you set out to aim it could have an effect on you?
While I understand there are other avenues into the course you want, you'd obviously rather get the Atar you were aiming for.
If you don't achieve the ATAR for your desired course, then yes, undoubtedly you'd be disappointed. But there's always a way to get where you want to go. Your ATAR is relevant for two/three months. If you don't get your first preference you get in somewhere else, and what happens then is squarely on you as you're not being ranked against others.
Personally though, I think it comes down to realistic expectations (based on the grades you get, how hard you're willing to work to get the grades you want, etc.) Having a goal isn't a bad thing, but if someone's unrealistic they're setting themselves up for a fall, a lot of stress, and as Superfruit said, missing out on the sense of achievement.