The consensus seems to change and divide opinion based on how ethical and/or moral a hobbyist likes to be.
I too have seen people "in the know" suggest cycling with fish, but the fact it's even suggested that it harms the Damselfish is enough to put me off.
The jist is that the fish is there to produce ammonia to start a cycle, but ammonia is hugely toxic to fish and burns their gills, inhibiting their ability to breath. They might not die from it, but it'll certainly dim their chances if there's ever a low oxygen situation in the tank because of overstocking, or high temperature.
It strikes me as a few things are happening when an LFS suggests cycling with fish.
- They get to sell a fish
- The hobbyist is keen to have fish in the tank
- The fish might die, and they'll return and buy more fish
- It's a Damselfish, so when they've gotten a little experience under their belt, they'll likely return it, usually for free, or at most, credit.
Also, I'm not sure I'd use ham or even beef to start a cycle, I'd stick to anything that came out of the ocean, like a bit of raw fish, or a prawn or two. :)
Just because ham will likely have preservatives and will be cooked, so not ideal.
EDIT: Actually as you've asked such an opinion based question and mine is but one, I've added a poll to canvas the opinions of others, whether they want to further comment, or not. :)