I don't believe Cold Steel's marketing practices do any measurable or appreciable harm, no, because I don't believe you can further outrage someone who is already completely irrational when it comes to his or her fear of tools and weapons. Furthermore, I don't think trying to cater to such people by attempting to pretend or hide (to the effect that knives are only ever tools and never weapons, etc.) accomplishes anything because such people cannot be and never have been successfully appeased.
To me, it's like the argument that was advanced when the Somali pirate news stories hit the media cycle a bit ago. We shouldn't arm the ships the pirates are attacking, we were told, because if they encountered resistance they might really get angry. Well, by the same token, I understand the logic behind trying not to upset sheeple and hoplophobes. I just don't think that attempt accomplishes anything, and I think the result is that the ownership and carry of weapons is further marginalized and the concept rendered illegitimate in popular culture.
Acting like we have something to hide is, to me, the bigger problem. I think Lynn can stab as many car hoods and slice up as many sides of beef as he likes; I don't believe he's truly doing any damage because I don't believe the people we'd rather he not upset can ever truly be placated.
Logic is the science of non-contradictory identification. It is, in fact, possible for two people to disagree while employing logic to reach different conclusions, depending on the premises they accept and reject. We disagree on the premises. This does not mean that one of us must necessarily be uniquely logical while the other is employing only rhetoric.