the real answer is it depends, just like you shouldn't say every single quicklube is going to destroy your car.
If they truly are a decent carwash and have invested in the latest technology, and their system and sequence is setup properly so the bulk of the material doesn't stay on the cloths, then it won't damage your car more than any other wash. For example, they do a foaming prewash.
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End of the story, is you probably get what you pay for.
If some place is advertising a cheap wash, that's price is going to come out somewhere-plus all the cheapskates with really dirty cars go there.
If there's a better place that charges $5 or $10 more than the cheapo place for their wash, and you see luxury and exotic cars going there and coming out looking nice; there's probably some a good reason for that.
I would not blindy say hand wash preferred, especially if the price is low as mentioned above. These guys are paid minimum wage if not less if it's cash. Do you think they care about your car. Mitts can just as easily be caked with dirt in some big tub of dirty water, with the cheapest car wash solution, and grind swirls and scratches into your car.
At least with the machine wash, the human touch element is taken out of the equation.
All carwashes are going to result in some wear, it's a fact of life. You can't prevent it all, unless you never drive your car or personally handwash your car with utmost care.
INstead, just give in that you instead need to have some kind of sacrificial wax on your car that takes the hits, rather then trying to avoid all damage.