Well, I don't mind that kind of shit, and as a teacher I did it all the time. It helps get rid of group-think problems, helps people with group picking issues like @SuchIrony's, and allows for equalization of the playing field. I never let groups remain for too long. It makes people better at dealing with unfamiliar others (which is a skill, and can indeed be improved with practice) and thinking on their feet. It also breaks up the kind of pre-formed, petty power hierarchies that hinder personal and group progress.
But that's for assignments. I don't know about this "retreat," nor would I ever really recommend this as a friend-making device. Although, now that you mention it, don't we make most of our friends through school and work? And aren't school and work basically just another kind of forced socialization? So yeah, maybe it works for that, too.