Is group identification a good thing or a bad thing?
I think that this is going to be dependent on a variety of circumstances. There needs to be more clarification in the question. There are times when group identification can be quite powerful. For example, the concept of unionization is one where individuals in a group form solidarity to represent the needs and demands of one another. Another form of group identification would be in the form of social protest. The demonstration of "Take Back the Night," where those affected by sexual abuse and sexual violence speak out and form a group identification for individuals who wish to take a stand against such atrocities is a good thing. I would also suggest that the idea of identifying oneself as part of a group can be a good thing, in general, for it allows the individual to think past one another. Any social movement in the world has been one of group identification. The student protests in the Arab World that have resulted in massive social change are based on group identification that demands change and transformation.
I think that there are plenty of examples where group identification can also be a bad thing. Any time the group seeks to silence the voices of others, I am not sure group affiliation is the best of things. This can be on a trivial, but significant level in adolescent and preadolescent relationships regarding bullying and intimidation. The film, Mean Girls, is a great example of how group affiliation, namely that of "The Plastics," can be a bad thing. Group affiliation that embraces ends of destruction can also be bad. Al Qaeda or other organizations that define themselves trough violence and the intentional hurt of others is not good. The presence of the Ku Klux Klan or Nazism are examples where group affiliation is morally repugnant. In the end, the question requires more clarification as to how group affiliation can be seen as both good and bad, depending on situation and context.