If several breeders reports a calf out of an AI sire born with a potential genetic defect, our breed association uses the sire on his daughters. If he is carrying a genetic defect - it WILL show up using his daughters. They breed a certain number of daughters - if they do not have a calf born with the defect - they clear the bull & let semen sold on him again.
So, if you breed a bull to daughters, like Dun said, if there is a recessive gene (a gene that does not get expressed in the calf unless the calf inherits the same gene from both mom & dad) that is a BAD gene - your offspring has a high probability to express the bad gene. This is not just genetic defects, it can be a health problem, it could be poor feet, structure, the list goes on & on.
Now, if there is this super bull, and he doesn't carry ANY poor recessive genes, you may be duplicating all his good genes.
I would prefer breeding 1/2 or 1/4 sibs. I guess that's linebreeding instead of inbreeding (father to daughter).