Whomever told you it was a "spam service" doesn't know what they're talking about. Press Releases have been around almost as long as their has been a press. For it to move online was a natural progression.
Services like PRWeb only provide a means for small companies to do press releases. The releases themselves are not spammy and the act of distributing them also is not spam. As far as quality content goes, press releases are not considered quality content. Besides rarely containing any valuable information, they're duplicated across many websites that republish them. This is where the confusion probably starts. Services like PRWeb are not creating low quality content nor are they attempting to offer a service that manipulates the search engines. The sites that republish pres releases are the real problem as they are adding low quality content to their sites. If these make up a large portion of a website's content then Google will take notice and the Panda Algorithm will probably take effect.
But the fact that PRWeb distributes press releases is not an issue for SEO at all. It's only an issue for the sites that depend on press releases for content.