Group work only makes sense if the project is so big that one person cannot do all the work (think Engineering, Software, Research collaborations, Theatre, Film productions etc.). For such big projects it makes sense to assign specific roles and responsibilities to each member of the group, based on skill-set. If someone is not doing their job it will be very obvious and that person can be held to account for it.
I think most university "group work" is actually small-scale work done in a group (i.e. an individual could comfortably do all of it), which is why people have such bad experiences with it.
I have also read somewhere that generally, individuals tend to produce more original / better quality work than groups. Original ideas tend to get shouted down in groups depending on the popularity and social hierarchy of the group members.