The short is answer is.....yes. However, that simple statement ignores the many reasons, exceptions, and more that will now be detailed below.
Is Kicking in Taekwondo Bad for Your Knees?
This is the largest source of controversy. Many argue that kicking puts the body through sets of motion that it would absolutely never do in a natural setting. Taekwondo kicks, especially, are very unnatural movements, all the way from chambering to how the kick snaps before contact. However, these critics tend to completely ignore the extensive stretching done before most Taekwondo classes. Taekwondo athletes are among the most flexible, rivaled only by gymnasts and yoga practitioners. These stretches prepare the body for acrobatic and high-reaching kicks. However, stretching does not usually aid the knees and muscle must be built in these areas instead to ensure stability and to prevent injury. Without substantial amounts of muscle in the area between the shin and the femur, the knees are very prone to rubbing together and causing injurious friction. Snapping your kicks, especially, can prove to be distasterous in the long run if you do not have enough supporting muscle. These muscles can be built very easily by positioning your bike seat lower when riding around, squats with and without weights, etc. Knee problems from kicking aren't usually an issue at all for people under 25. However, Taekwondo athletes should strive to kick solid targets and kick the air less often, as the air does not offer proper resistance to prevent the knee from overextending.
Verdict: Kicking is only bad for you if you aren't prepared for it
What About the Rest of Taekwondo?
This question usually accompanies the previous one. Most of the other aspects of Taekwondo are actually very beneficial towards you joints. Stretching is immensely valuable. Forms, when done with proper form and intensity, help build up strong joints due to the stances. Breaking, when done within your limits, builds strong bones through the principle of Wolff's Law, which is commonly seen in Muay Thai shin conditioning.
There are only three sources of consistent knee pain and injury that can be found in Taekwondo. The bouncing seen in Olympic sparring applies stress to the knees in jolts when done for extended periods. Repetitive full power kicks aimed into the air can cause the knee to overextend. The third and most common method of attaining injury is not stretching properly beforehand.
All in all, Taekwondo is a martial art that is actually largely beneficial to the knees, if done with proper precaution. Without precaution, it is just as injurious as other sports.