Lugging the engine is not good. Puts a lot of uneccessary strain and load on engine and drivetrain components. On flat land, it's not so bad (slap yourself on the wrist), but going uphill and lugging is a no-no (Mutombo finger wave).

That said, turbo engines operate better under a little load. I forget the exact engineering reasons why, but such is the reason why they almost feel a little bit stronger when going uphill.