First, let us stipulate that there are two types of group content: transient; and extended.
Transient group content is content that is expected to be completed in a single session of play. The group is formed, the group completes the content, and then the group is disbanded. In WoW, group quests, battlegrounds, and 5-man dungeons are transient group content.
Extended group content is content that is expected to be completed over several sessions of play, and where the group is composed (more or less) of the same individuals throughout. In WoW, raids and PvP arena are extended group content.
Lately, I've come to the conclusion that transient group content is crippled without automatic group creation.
I've been playing a game (Age of Conan) which doesn't have a Dungeon Finder for groups. You have use a Looking For Groups channel, like in the old days. And it is terrible. It literally takes hours to form a group. I have never appreciated the Dungeon Finder as much as I do now. I remember having a lot of the same issues when I was playing Lord of the Rings Online. In fact, I stopped playing that game because I rolled a group healer and yet I found grouping to be too hard.
As well, because group creation is so hard, people seem to feel free to take advantage of the group with long afks, or generally do their own thing while the rest of the group waits for them. I remember that this used to happen a lot in WoW in the pre-Dungeon Finder days, but has since been eradicated from the game. Whatever the faults of the "gogogo" culture, at least they aren't wasting my time.
Without automatic group creation, the amount of time spent forming the group is excessively long, and makes grouping an unattractive proposition. I think this group creation time is really what keeps people from grouping up, more than any other concern such as rate of experience gain.
Other games have sort of approached this, while still leaving humans in control. For example, Warhammer Online had "open" groups, where you could just join a group instead of needing to be invited. While that was better than the old system, it still isn't as good as a fully automatic system.
It's interesting that the PvP side has always seemed ahead of PvE when it comes to this. Battlegrounds featured automatic group creation long before PvE. Perhaps it is because of a lot of the formative ideas for MMO PvP came from the First-Person Shooters and Real-Time Strategy world, where automatic group creation is the norm. While PvE grouping was stuck with the idea that it was important to let people choose their own groups.
Of course, automatic group creation is probably a bad fit for extended group content, if only because play sessions for the group need to match. In transient content, you know the play session matches because everyone is already online.
But it's also possible that I am wrong about extended content, that I am too used to the old system of making guilds, and I overweight the problems, and underestimate the convenience.
Perhaps an automatic matching system would be a good improvement for extended content. For example, a Guild Finder. Guilds could post what their schedules were like, or what type of guild they were, and players could do the same, and the system would automatically add people to guilds.
I think the bar has been raised for future MMOs. If an MMO has transient group content, it had better have automatic group creation for that content. As well, WoW needs to implement a system for group quests, as that is the last piece of transient content without an automatic group creation system. And group quests are noticeably the hardest content to find a group for.