“But then why does everyone always want as many links as they can get?”
Not to directly answer your question, but most people don’t know what they are doing in this area.
Exchanging links doesn’t really increase PR. It’s just an exchange. You get 50 soldiers from one page, you send them 50 soldiers. Of course if you send 50 PR3 soldiers, and get 50 PR5 soldiers, then that will increase pagerank. But between equal pages it just shuffles soldiers around.
Outgoing links are good to help define what your site is about, not for anything having to do with pagerank. Link exchanges get you anchor text from different domains and IPs (and visitors) but they do next to nothing in terms of pagerank. The “better” a page (in the search engine’s opinion) that you get links from, the more valuable they are in non-pagerank ways, but then that gets complicated in the same way as pagerank… too many links on a page sends an impression that the linked-to pages aren’t very important, even if they are links from a page the search engine thinks is a nice page.
Unless you have a one page domain, your pagerank priority should be to recycle the pagerank throughout your own pages, rather than aimlessly pass it back and forth from other domains. A site with a PR5 main page and PR2 interior pages is blowing it.