does it increase nearsightedness? yes, it can.
if you use a computer excessively (such as at work all day and then at night when you get home) or look at any screen of any sort (be it a tv, video game console on a tv or a computer monitor or projector) your eyes are not focusing on a different focal plane so get used to a certain particular focal plane (close up) since that is what you use most often. in essence your eyes arent used to looking at far away objects so it might be hard to focus on them and things may appear blurry.
now this is a seperate issue from any eye damage or deterioration that it might cause which is what maddogfargo seems to be pointing at. in the case of this having a correct sized screen where nothing appears...