I don't understand how anybody who knew anything about the business could think that this was sustainable.
Are you talking about Groupon here or the businesses? I'd guess Groupon fully knew what they were doing - they know they have a small window where they need to make a killing. Why do they care after that? Why do they care if they screwed over thousands of small businesses? They'll just move on to the next legal scam.
I suppose it is upto the businesses to not fall for such one sided schemes. Maybe it is peer pressure, if every business around them is doing it, they feel pressured to do it too? Maybe a restaurant owner is good at making food, but not that good at running a business?
I hate companies like Groupon...