I think the idea behind fluoridation is that fluoride ions make makes the enamel on your teeth more resistant to acidic erosion.

Having said that, I did a research internship in college, and one of the other students also doing the internship presented his project, which showed that fluoride decreased bone density (he did this by exposing bone cells to fluoride, I forgot the exact method).

I've also seen many studies where fluoride has been linked to mental problems.