i think celebrities ruin fashion, in the sense that they are probably the major influence on the trends adopted to by the general public, and i think they do not generally have a firm grip on what looks good and what doesnt.
it has also seemed to have gotten worse in the last 5 years or so, as celebrities increasingly have a lot of pressure dressing for events so that they do not get crucified by the tabloids the next day. the oscars and other events are boring now as celebrities look more and more homogenised- when uma thurman wore the christian lacroix last year she said one reason she did so because she was tired of the confines imposed by the press.
i think though one of the problems is not what celebrities wear, but the culture of celebrity worship itself that is ruining fashion, as it stifles individual's style when they strive to emulate their favourite figure, with no view to what suits them. for instance, kate moss looks amazing and makes great, daring choices, but every person on the street wearing superfines and ballet flats dont neccessarily achieve the same look. i think if their was more focus on designers, then people might choose looks that suit them and develop their own style.