I had a similar issue building my Prusa i3 Mk2s clone. I was constantly hooking & unhooking my Arduino from my PC while the printer was plugged into the mains. At some point it had enough & it released some "magic smoke". Later on I found out this was the power regulator on the Arduino.
You shouldn't **need** to plug in the USB and the external power to the Arduino at the same time, but if you did, it is smart enough to only use one.
That being said, by default the RAMPS passes 12V straight to the Arduino in order to power it (the Vin pin).