Why does it matter if other players are in a group?

The reason you would care is because people who play as a group are more likely to have good synergy and teamwork, especially due to the fact that they are more likely to be using voice chat. While the game does indeed have in game voice chat, and as @DanmakuGrazer pointed out- that defaults to a private channel for groups, and very few people use in-game voice at all in my experience. They are much more likely to use something like teamspeak or curse voice as a group and coordinate strategies. I would consider is desirable to be paired with a group of players because of this, and I don't think it is poor etiquette to play as a group of people. If it were, the option probably wouldn't exist, and I personally prefer to play with my friends rather than random people. Though, if you do play as a group of 4 or 5, you may get accused of trying to pubstomp or tryharding.

The reason a lot of people care would be how matchmaking in most team based games works, it tries to match groups of players against teams that have other groups of players. So if you and your friends are a group of 4, it will try match you against another group of 4 and then fill in the extras.

Now from your side of things that seems fine, as it's a 4v4 team with some extras. Since you would both be equal in terms of communication and teamwork. Although imagine the reverse when you are one of the extra players, you are playing against a group of 4 with superior teamwork and communication while getting no benefits of a team yourself.

An example would be your group of 4 decide to ball up and roam together, player 5 has no idea what is happening as it hasn't been communicated to him, he goes off to do his own thing. He encounters the enemy team who have also decided to ball up and roam together, he dies.

I believe that may be why some people prefer the idea of a separate queue for solo play only, so they know no one has any extra teamwork advantage on them before going into a match.