Tiggette
Well yeah, royal families in Europe were notorious for inbreeding, and the byproduct of that is usually why people frown upon it now. Too much of it increases the probability of your kid having a couple screws loose. I mean, biologically humans need some genetic diversity.
Too much inbreeding usually leads to genetic defects, but the risk is very often overstated. The offering of two perfectly healthy cousins is mostly likely going to be as healthy as a child born from two unrelated people. It's in the cases of inbreeding over several generations where the birth defects come into play.
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But that's a whole other subject aside from culture. But uh, it's not impossible to keep traits without inbreeding. If that logic were flawless there'd be no blue and green eyes today. You don't need to inbreed to have a kid with your traits... granted, the chances would be slimmer the farther you branched, and I guess I see the logic there.
Not impossible, but the farther you get from the source the more diluted the genes would get. In a clan that was defined by an advantageous genetic anomaly (Byakugan, Sharingan, etc, etc), they'd likely only want to outermarry when necessary so the kekkei genkai wouldn't disappear. (I seriously doubt kekkei genkai genes are dominant)
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Of course, with royal families, I see no upside to inbreeding. Unless you're trying to keep something genetic going you're just playing with fire for the sake of having some fictitious "pure" blood.
Plenty of cultures place high value in preexisting bloodlines. There's usually no tangible benefit to this, I'll give you that, but that doesn't stop that preference from being there. They only upside I can think of would be (again) if the only heir was female and she could marry a cousin, thus keeping her name)