I have read one theory where the danger of a high protein diet can can be muscle atrophy. The fact being that each macronutrient has specific functions in the body (Carbs=energy, Protein=muscle anabolism, enzyme synthesis, Fat=energy storage, hormone production, neurotransmitter production, etc.), when you limit the intake of one, another will have to pull double duty to the detriment of its primary duty. When you have no carbs for energy, and rely ketones, you have less protein available for muscle building duty. Ergo, loss of muscle. This is part of the weight loss that many experience, in addition to water loss needed to expel all those ketones.
This would be true, I suppose, if the Atkins diet was ALL about low carbs for the duration. Carbs are later added after the induction phase. I think the main point behind the initial low carb phase is to get people to lose a lot of weight FAST, getting them in the mindset of "This diet really works!" Then, as they continue on and start adding things back, and suddenly the 10lb a week becomes 2lb a week and then they start to plateu off, they lose interest, go off the diet and gain all the weight back.