We're - in general - not big fans of griefing for any game. It's really only "fun" for one person, and that definition of fun isn't generally something we're going to want to encourage. It's far more positive to encourage and support meaningful and skillful options and systems within a game, than a mechanic for people to instantly turn against one another for no meaningful gameplay reasons.
I definitely remember running with my friends, and someone toggles it, and bam everyone is dead and your one friend is laughing. Ok, ok, good joke I guess, and then you run back and *bam*, you've toggled it to get them back. After a while everyone usually agrees to a truce because it's just a waste of time. But I also remember running with random players and losing extremely nice items because of it, not cool. I'm sure that it was a feature that was right up some people's alleys, I won't deny there are some that would enjoy nothing more than to see others frustrated, but is that truly something that should be encouraged through design - if not directly opposed?
We have a large focus on cooperative play for Diablo III, and the mechanics and design decisions related to multiplayer are likely going to be based on supporting and encouraging it as much as possible, and not breaking it down.
That doesn't mean that PvP won't have its own focus, but those are details and features we aren't yet discussing.