As far as psychic powers go the Buddha forbade his monks to tell others about or make a public spectacle of themselves - as that could lead to ridicule (as would happen now). If the teaching of the dhamma was based on thee converted by Public displays of miracles, then they would approach the dhamma for the wrong reasons. It would also bring disrepute and disrespect for the Buddha, Dhamma and Sangha. I think, seeing these faults, and because those faults are very detrimental to the survival of the Buddhas dispensation, it is indeed catastrophic in nature.
This does not mean those things don't exist or arent possible. The Buddha clearly states those powers as results of intense practice (kayagatasati sutta). Those practitioners with sufficient depth of practice will know what I mean. Seeing your own past lives can be particularly useful for the path, because it motivates you to remove yourself from samsara, pronto.
Dipa Ma is known as someone who had all these psychic powers. Joseph Goldstein talks of her here:http://dharmaseed.org/talks/audio_player/96/10100.html