Masturbation has long been condemned on moral grounds in Western society, going back to Biblical times. The Talmud forbids it as a waste of the gift of fertility. The influential eighteenth-century philosopher Immanuel Kant wrote that in masturbating, "a man ... degrades himself below the level of animals."
Given that reputation, it's no surprise that masturbation should be blamed for physical decay as well. In fact, if all of the dire consequences threatened were true, there would be a lot of blind, insane, sterile people with hairy palms and acne walking around.
We can't speak to the spiritual or metaphysical effects. However, we can say that masturbation has been as thoroughly researched as any topic in sexuality (and that's saying a lot), and no connection to the physiological effects has been proven. The truth is that masturbation is a normal part of sexual development. It's how children learn about their own sexuality, and how adults learn about arousal and pleasure, both alone or with a partner. Some evidence even suggests that in older men, at least, masturbation reduces the risk of prostate cancer.