You're not hurting the machine, it's inanimate, but you're courting a HD failure and ''loss of all data.'' '''If there's no sensitive or important data ''no need to worry'' but if you have sensitive data that would be a PITA to replace''' you need to make time for a backup and replacing the drive. Once it fails ''you will "find" the time that seems so elusive now.''
HD's fail - five years is a lifetime for some HDs. Laptop HDs are especially abused. You can get an external HD case for the failing drive (that's what you're describing) and put a new drive in the powerbook, format and install the OS, then use Migration Assistant to transfer data to the new drive.
Good Luck,
N.