They spend less getting the product out (and get an almost guaranteed big order!), it costs less for the consumer, groupon takes a small cut, everyone wins (in theory).
Your theory may be correct if they were only offering the discount, but in addition to the 30% a business has to offer, they then have to pay 50% of the deal to GroupOn. So, GroupOn allows them to eliminate ad costs via the discount, but then tacks their fee on top of it, which crushes any hope of margins for the business.
Ultimately those cuts are going to be under constant assault. It's really a race to the bottom, but it's going to be a money train until they get there.
GroupOn?
group-on?
You reek of bias when you take little jabs at a company by misspelling their name. It's immature and distracts from your more substantive points.
I had to stop reading Mark Cuban's blog when he kept writing about MicroSoft. I'd like to think that HN is more mature than this...