The article mentions "Another friend was skeptical about the concept because how can you keep up the quality if you offer the same deal for 1/2 price." It's not half price but rather a quarter of the price; Groupon takes a cut. Even though it looks great to the business to get started with these promotions, a lot of businesses are losing money from them. You have to put this into perspective with many of the traditional ways of advertising - cost to conversion for mailers, T.V. ads, etc... (you also have to consider how many of these customers return). It may turn out that Groupon is not the best solution, but I guess it depends on the business model...
It is not just Groupon that hurts customers. When another partner website jacks up prices - they are also accountable. How do I know this? I spent one day (I chose it as my final working day)working Groupon complaints at a company where the pricing on the company portal Groupon page was jacked.