However, there's a more important medical reason: acetaminophen accentuates the analgesic affects of opioids, although the mechanism for this is not clearly understood. This makes acetaminophen-enhanced opioids more effective drugs.
Opioid abuse has become so rampant, though, that we're moving away from prescribing acetaminophen-enhanced opioids like Vicodin and Percocet to try to stop them entering the recreational drug market. As opioid use has increased, so has the number of liver toxicity deaths due to the acetamiophen in some prescription opioid drugs.
But the original point was about whether paracetamol is toxic, not how often people overdose on Panadol (though that does happen in suicides). And the answer is "yes, but not in the dosages you'd normally see".
This doesn't really undercut anything you say, but if I was given accurate information I assume a subset of those acetaminophen OD deaths are from people abusing painkillers it's combined with. I haven't looked into it, but I assume this is also a partial explanation of why OTC cold medications with Dextromethorphan in them tend to be combined with a relatively high dose of acetaminophen. I would guess there are other good examples of abusable pharmaceuticals combined with acetaminophen.