Communications and status updates were easy problems, relatively. Especially compared with the mine field of the reward structure. The next element I want to look at is content gating.
Many games implement areas where only one group can enter. Or two groups, or five groups, etc. When the designers put a cap on the number of people that can enter, it allows them to more reasonably design content. If group size is 5 and you limit the dungeon to a single group, you can make content and then test it with varying groups of 5 characters much more easily than trying to design content to scale in challenge as the number of people increases. Something that is challenging for a group of 5 might be trivial to a group of 10. Of course, a formal group structure isn’t required for this, as the number of players within an instance can be maintained by the instance itself. You could even place a UI element called “People in Instance” that would provide you a list of the players in the instance for easy selection and pinning to your UI.
After a long look, it actually seems that the main benefit of groups to content gating is actually in getting people who intend to play together into the same instance do they can play together. Getting around this winds up being overly complicated with solutions like having one player enter the instance and then inviting each other player to join him. That first player being designated the instance “leader”, a job he will pass off to someone else if he quits playing. Then you have issues of players wipes, when everyone gets killed. How does the game keep track of who belongs to this instance? Is it because you have a dead body in there to recover? If you get frustrated and log off for the night, is the group now permanently down a player because you left your body in the instance so the game holds your place? Again, it looks like if you wished to remove the group mechanic from the game, like with reward sharing, you wind up needing to examine the entire game from the ground up and make changes all over in places where the group mechanic was either planned on or taken for granted.