I see no inherent problem with debt. Its all in how you use it. I had no problem taking out a mortgage in '99 to purchase my current home instead of using cash. Mortgage rates were 6.75% when I borrowed. I have averaged 16.7% with the funds and made several times over the value of the money I borrowed. I had the cash to pay off the mortgage at any time and was confident I could do better. Even if I had performed as poorly as the S&P500 I would not have been out much.
I would not hesitate taking a sizable mortgage in this environment to keep my investments intact.