While obfuscation in general is a bad thing, IMHO, with Javascript, the story is a little different. The idea is not to obfuscate the Javascript itself but to produce shorter code length (bandwidth is expensive, and that first-time users may just be pissed off waiting for your Javascript to load the first time). Initially called minification (with programs such as minify), it has evolved quite a bit and now a full compiler is available, such as YUI compiler and Google Closure Compiler. Such compiler performs static checking (which is a good thing, but only if you follow the rules of the compiler), minification (replace that long variable name with 'ab' for example), and many other optimization techniques. At the end, what you got is the best of both worlds, coding in non-compiled code, and deploying compiled (, minified, and obfuscated) code. Unfortunately, you would of course need to test it more extensively as well.
