This feature is nice/important to ease users the transition from tools like Ganglia, which contains "out of the box" overview pages for each group, where graphs for some standard metrics like CPU/Memory/Network usage are displayed for all hosts in a given group, all on the same page.

ZBXNEXT-570 is about putting item from all hosts in a group on a single graph

This was implemented as part of larger patch:
http://blog.sepa.spb.ru/2015/08/zabbix-graphs-improvements-patch.html
Feel free to take only part needed, i've tried to comment out the code.

Here is nice page http://www.zabbix.com/development_services.php where on the bottom of this page is possibility to Contribute on specific feature. I think that it can be way how to promote some feature requests and to do something like crowdfunding on specific feature. Zabbix dev setup price and we can contribute on this feature I think it can be good way how to pay for each feature and to to pay whole development by one customer.

Current behaviour is plain wrong anyway. Show each item once and display all graphs matching hosts and item.

Yes please!  Groups are created exactly for this purpose and you have aggregate function over a group, triggers, a lot of UI functions.. but no graphing ability