Any physical hardware/machine's practical capabilities are less than theoretical. For example, you can't speed up a bike to full speedometer's highest scale. If you do, something will go wrong.. You can't transfer data with 60MBps via USB 2.0 port. If you force, something will go wrong.. Same thing applies to speakers too. VLC Media Player crosses the practical limit which leads to reduction of speaker lifespan as well as quality. Laptop speakers are affected quickly.
BTW, The blame shouldn't be given to VLC Media Player directly. VLC Media Player is an application software which can't damage hardware. It simply uses interfaces given by device drivers. If your sound driver restricts applications at practical limit, you are safe to go even with 400% volume in VLC Media Player. Despite this fact, some vendors like HP fight against VLC Media Player. Here's a statement by HP: “the laptop will not cover under warranty if its identical that the diagonse report finds the user used the VLC player.” So, be careful while using VLC Media Player on Laptops.