I think this concept is a great one. I always text my kids in one text but the responses get sent back as individual messages. Group texting will be a hit.
Group messaging has started to become popular for people who want to coordinate events, meet-ups, or just chat across a small sub-set of friends or contacts that dont necessarily find the existing messaging in Facebook, Email, Twitter or via SMS convenient, usable, or private enough. Beluga, GroupMe, and sometime sooner than later Google Disco are the current flavors of the month for this type of app.