Whichever way you look at it, design by committee is a potential risk and hazard to good web design.
Many areas of design are subjective in the same way as a colour choice or a house interior is. Everyone has his or her own preference and to compromise for all would produce a mess of a colour or a house with no character.
When design choices are made by many, a clear direction can be difficult to attain as the creative direction becomes increasingly split. The design character is watered down so much that it eventually loses any originality. It becomes safe and one big compromise.
Using colour choice as an analogy for design choices, a group may correctly determine that red conveys danger. Or does it convey passion? Or is it too festive? There are a lot of other colours that could be discussed! Arguably, there is a successful debate to be had for the colour red but others are not so black and white (pardon the pun) and purely subjective. Arguably these should be omitted from the scope of group critique but some may fare well.
To ensure that design does not become too sterile, clear creative leadership is needed. Furthermore, this will reduce costs and help ensure time deadlines are easily met.
We could argue that certain elements of the design should be opened up to some level of scrutiny by the many. The creative leadership should think carefully at which points in the design process these should occur carefully. Key areas like navigational testing are prime sites.