I am sorry but you are wrong. I have a background in bodybuilding and there is a myth that squats kill the knees (in healthy people). You can safety squat all the way down (we in the bodybuilding world call it @$$ to the grass) without any knee pain.
There are a few requirements to take into account. Of course the first is keeping the back straight. A lot of people push and balance themselves on the front portion of their foot which is wrong. Your weight needs to be on the back of the heal (as if you were squatting down in the woods to take a crap lol) . It feels weird at first and some might even fall over trying to do it but its the correct way to do it.
When you squat your knees shouldn't move forward past your feet. If you are squatting deep and your knees are moving past your feet then you are doing it wrong and that will hurt your knees.
So to recap:
Back straight (some recommend head up the help keep back straight but that is person preference)
Keep weight in the heals of the foot
When you drive up drive with weight on heal and use hips to move
This is how to do a proper Full Squat (@$$ to grass squat)
Barbell Full Squat