I don’t think it’s an issue as long as there’s full disclosure. If a person feels very strongly about a book written by a friend or fellow crit group member and wants to review it, my advice would be to disclose the connection at the beginning of the article. And I’d make a point of giving as objective-sounding a review as possible.

That way, readers can take the reviewer’s potential bias into consideration, and they won’t feel like someone’s trying to put one over on them. It’s when people do reviews without disclosing sources of possible bias that the reviewer’s credibility can be called into question, IMO.