All the arguments for the legality of Grooveshark aside, it is ridiculously (read: Napster-like) easy to download high-quality MP3s from the service for free. Yes, there are rippers for Youtube and other services, but the quality of downloads is so spotty.
I watched a friend used GrooveShredder  the other day, which is a simple Firefox add-on. In 10 minutes, he had downloaded about 50 tracks. That alone made me realize that they were on their way out, so all the arguments for their legality are largely moot.
How the story about your friend doing something (supposedly) illegal leads to conclusion that "all the arguments for their legality are largely moot"?
Especially after you tell in the very first sentence of your comment to leave arguments about legality aside.
Is this how you propose to judge the legality of a service?
Can overcome technological restrictions
to save music into a file instead of letting
the browser download and play it immediately?
Is the resulting MP3 ---- No ----+---> Legal
of high quality?
I'm pretty sure he actually meant to put all arguments about legality aside. Any service, no matter how legal, that enables you to easily download high quality label music, no matter how illegal that process is, will be intolerable.