I don't know about CS, but in most scientific fields, this may be a bad sign. It can mean they're just trying to pump up their own reference counts, or it can mean they don't really know what other people are doing.
The only way to be sure that neither of these is the case is to know, a priori, that they're truly doing groundbreaking work.
1. Here is a paper about some interesting things we've been looking at, here is what we know, here are some ideas we are building on. These tend to be presented at conferences, as a "what do you guys think?" sort of introduction for the larger community. It is nice, because other researchers can then tell you if this is actually new, or just a repeat of an idea (that was hard to find because it used different terms and went nowhere), or something worth looking into, or the old "hey, here's some pitfalls I see from my expertise".
2. A couple more conference papers with results building on the ideas in the seminal paper in 1. These are just to keep awareness of your work to others in the field, get feedback, and to play the game right - you get much less credit if you don't have a history of showing you've been working on this for a while when someone comes along and "scoops" you.
3. Actually interesting/important work. This is the type of paper that the OP calls "groundbreaking". After all that work (see documentation over the years), here is something pretty awesome!
Another facet of this process:
When doing research, you have no idea what you are doing. I mean, you have expertise and goals and hypothesis/theory, but you don't know how it will pan out. You don't know if you suddenly find a spot where a left turn is required. So publishing about these new things is a good idea. Other people in the field can benefit from just that. Further, in my experience, each small result tends to spawn more questions/investigatory tracks, etc than it closes. So a lot of papers with honest "future work" sections are great places for grad students and others new to the field to dive in and get their feet wet. They can follow some of the tracks the original researchers just had no time for, and help fill in gaps.
Finally, the self reference is a good sign, because it establishes you aren't just some person coming out of left field with $BIG_IDEA (which looks a bit crack-pot-esque...)
"Groundbreaking papers...out of research teams in smaller universities that have been tackling the problem for about six to ten years. The later is easy to spot: they reference their own publications in the papers, showing that they have been on the problem for some time now, and that they base their new work on a proven record of publications."
Don't most bibliometrics exclude self-citations?