Looking at this two years after I suggested it I should add that my stance on it has slightly changed. I still support the idea of course, but it's moved from the sake of having tags, looking cool, and essentially grouping up to have the "best players ever" to something along the lines of encouraging users to engage with each other.
I love the enthusiasm from other people, which is great. A lot more here then I expected.
I'd edit the original post, but if this was to be considered for future implementation, then I'd rather have it looked at from the original and work on it with suggestions from others.
I'm for the name "Squads". Not to mention, the original osu! idea was for a male cheering squad exerting their ki to people to help better themselves, so essentially encouraging group interaction. This is also another thing as they're found at sports games, so a "Squad on Squad" situation would be presented as well. Although, the way the community is at the moment, compared to back then when I did suggest it, well... Let's just say it's taken a turn for the worse.
I'd love to see this happen though, I seriously do.