A topic close to my heart
In the late 80's I developed the first 2-4-1 pizza shop in our city. We basically just added the food cost of the second pizza to the first. Everyone else in town was waiting for us to go broke, we never did and expanded to 11 stores and had the largest market share within 30 months. The pizza was very good though.
What was once an unimaginable "deal" is considered very gimmickey today through the customers eyes. Everyone knows how it works. The one drawback is that in many cases, people do not want two pizzas and do not want to pay 30% more for a secomd one that they do not want. That is why many/most menus today have a price for one and a separate price for two - kinda defeating the whole gimmick.
I don't think price wars cheapen the brand if your in the fast food version of this business, it's "d'rigeur". But at the end of the day, couponing is and will always be a short term solution to a long term problem - repeat business. It's all about value and convenience - that's the goal.