Lot of people here and even on other Microsoft sites are in state of disappointment, some may even feel worse than that especially who are really invested in.
Personally I feel so much disappointment yet at the same time, not surprised since they never seem to care or out-of-touch with consumers. Though Groove Music wasn't really something that people expected to be killed off that swiftly especially how much effort they put on that app, except on iOS and Android which is almost useless and now useless without streaming service. The only big problem was it wasn't really marketed at all, not even a dedicated social media page.
Is it beneficial for the long run, hard to say. For Microsoft maybe since it save them some cost of maintaining and developing the service and even the app, which will eventually stop improving anytime by now. Putting the app in maintenance mode when they are finished with their roadmap. Only to change on few things if its really needed. Maybe for Microsoft, other music streaming services may take the platform bit more seriously since there is no competition from Microsoft themselves.
For consumers? Well for most, nothing changed since they never knew Groove Music since it wasn't really advertised anyways, except for some pop-ups maybe which many might get annoyed and turning it off. For consumers who are an actual customer? Well they are the ones who got burned by this, both for streamers and just want an convenient place to buy music since Microsoft Store will also discontinue their music catalogue. Customer's confidence and trust is broken as a result, and maybe be harder to bring them back.
If this trend continues, then Microsoft consumer presence is really in jeopardy if not already. People will continue to treat Windows as an OS preinstalled with their computers, until they are lured to buy to another platform. Gamers stay on Windows because of games available, not because they like Microsoft. Enterprise is really where the most satisfaction to Microsoft product, and this likely the effect of shrugging off consumers since they are too successful on that field that they are blinded by it.