Yes they are a bad thing, Sandy, because they make for weak government (as has been adequately demonstrated by this latest shambolic arrangement) and everybody gets what nobody wants. Since 2010 we have seen the party that came a distant third in the General Election calling the shots on a number of major issues.
If you want to see how permanent coalition governments really work just take a look at Italy. There, because of their ridiculous voting system, Coalition is the only outcome. There have been in excess of 60 governments since 1945 with only one lasting its full term. The average duration is just a few months. The country is rife with political corruption (mainly because of the shady deals that have to be accomplished to secure power); its economy has stagnated; its attitude towards women leaves a lot to be desired and its justice system is highly politicised.
Yes, the most successful nation in Europe at present is indeed run by a Coalition. But so is one of the least successful (see above). It is arguable that the UK may have been even more successful had Mr Cameron not had to pander to the whims of Clegg, Cable and Co.
Nations need strong government and that usually involves upsetting up to half of the people at any one time because most nations (UK included) seem to be divided politically roughly in half. Coalitions do not provide this. Personally I would outlaw all political parties and make individual MPs form their own Coalitions on individual issues. However, I appreciate there are problems achieving this in the short term so whilst parties exist I cannot laud Coalitions. All they do is allow also-rans to get their hands on the spare keys to No.10.