I used to feel this way. If someone had asked me a few months ago if I thought their team should start a blog that represents their collective team; I probably would has told them that it wouldn't go over that well. Now, however, I'm of the opinion that it can be done right and that they can even do some things that you can't do well with an individual feed. Recently we've been thinking about having a team blog for MSBuild so I'll use this as an example. Here is a quick dump of the pros and cons as I see them.
I think most people who are against it fall into the trap of feeling that you lose the personal touch that can only be had with a 1:1 blog. I think there are some good mitigations there that can still make it work. Having biographies, signing posts, still encouraging the posting of personal flair, and highlighting team morale events can all help. It also depends on the people who contribute as well. I might be biased, but from the feedback I've seen people still feel a connection to Gretchen and Zoe (Jobsblog) or to team members like YAG on the VSData team blog. I've also seen the readership numbers. I know that people not only do people still read most team blogs, but generally read them more than they read the equivalent number of team member individual blogs when combined.
What do you think? Personally I don't think it should be the only communication vehicle a team uses, but I think it can be a successful part of a larger community strategy that also includes individual blogs, newsgroups, wiki's etc.