The myth goes back to before SQL Server 6.5, which added row level locking. And hinted at here by Kalen Delaney.
It was to do with "hot spots" of data page usage and the fact that a whole 2k page (SQL Server 7 and higher use 8k pages) was locked, rather then an inserted row
Edit, Feb 2012
Found authoritative article by Kimberly L. Tripp
"The Clustered Index Debate Continues..."
Hotspots were something that we greatly tried to avoid PRIOR to SQL Server 7.0 because of page level locking (and this is where the term hot spot became a negative term). In fact, it doesn't have to be a negative term. However, since the storage engine was rearchitected/redesigned (in SQL Server 7.0) and now includes true row level locking, this motivation (to avoid hotspots) is no longer there.
Edit, May 2013
The link in lucky7_2000's answer seems to say that hotspots can exist and they cause issues.
However, the article uses a non-unique clustered index on TranTime. This requires a uniquifier to be added. Which means the index in not strictly monotonically increasing (and too wide). The link in that answer does not contradict this answer or my links
On a personal level, I have woked on databases where I inserted tens of thousands of rows per second into a table that has a bigint IDENTITY column as the clustered PK.