Tonight, Felipe Paulino threw 120 pitches. His pitch counts in his previous two starts had been 117 and 118, so it seems clear that the Royals value him as a workhorse (it's not as if he's simply blowing up his pitch counts in his final inning of any given start - Yost brought him out in the ninth on June 23 when he was around 110 pitches, and out for the sixth today when he was over 100 and had been working through trouble).
There are a couple things that can be said for this. One, he could well be a Verlander or Halladay type pitcher who can regularly do this with no ill effects. However, if 2010 is any indication, there is plenty of room to be skeptical. You can see here that he accrued a number of rather high pitch counts in the early part of 2010 in the Astros rotation. However, he went down with shoulder tendinitis in the middle of the year and ended up missing nearly half the season.
The other thing to consider is that, obviously, the Royals are (as of now) using a six man rotation, so he will have another day off. Will this change much? I am not sure.
After Edwin Jackson's 149 pitch no-hitter last year, J.C. Bradbury wrote a blog post producing evidence suggesting that the effect of one additional day of rest is marginal, lowering a pitcher's expected ERA by .015. He freely admitted not knowing exactly why, and speculated that most healing occurs in the first few days after an outing based on what he personally knew about muscles.
From a performance perspective, this suggests Paulino (and the other Royals' pitchers) won't benefit much from the extra day of rest, but the health ramifications are less clear. In his post, Bradbury linked to a study he did suggesting little correlation between innings pitched and time on the DL. His study seems flawed in that it counts innings rather than pitches, and doesn't account for pitch selection or anything of the like, but it is worth viewing Bradbury's original post in that light.