For interest's sake, I did do some performance tests with defragging an SSD on my Intel X2-M.
There is some performance benefit, but it is small - and for general use would not be noticable, or probably even benchmarkable. However, there are some circumstances, where the performance increase may be detectable.
The issue comes from how the OS accesses data on the drive. If you have a block of data that is stored "sequentially", then the OS will request the data in the largest chunks supported by the drive (usually 512 kB per each SATA request). The result is that the drive will internally parallelize the individual flash lookups, and consolidate them into a single response.
Where a file is highly fragmented, the OS will request the data in the size of the fragmented chunks - these could, in extreme cases, be 4 or 8 kB chunks. Each request needs a SATA transaction, takes up a space in the request queue, and has overhead both in the drive controller and host SATA controller. This is why the "4kB random read" benchmark scores are so much lower than the "sequential read" scores on SSDs.
In effect, reading a highly fragmented file has an element of "random read" in it, which reduces performance compared to a sequential access.
Now, this is not really much to get excited over. But, I set up a contrived case, whereby I filled up the drive with 4K files, and then deleted some of them at random to free-up space, and then filled it up with a single large file, that would end up being massively fragmented.
Streaming that file was horribly slow (about 30 MB/s). Following a defrag, streaming that same file was over 200 MB/s.
In terms of the amount of writes that the defrag put on the drive, it was on the region of 40 GB. In terms of how much wear that put on the drive, I'd estimate the cost of that defrag at about $0.02. (i.e. it cost less than the electricity used by the PC during the time the defrag was running).
So, would I recommend defragging an SSD? No. It's unlikely to be of any real value, except in highly exceptional circumstances. Does it cause temporary performance degradation? It may do. A freshly defragged and unTRIMmed drive, may well have slow writes due to exhaustion of free pages. TRIM support in the OS, or the use of a TRIM tool (like the intel toolbox) will restore performance. Is there significant damage? Not for a one off, or even a weekly defrag. Even doing it daily is unlikely to cause a relevant amount of wear.