It does kill grass over a period of time. Mikey peed in one spot for over 2 weeks and it turned brown and the grass died. That's how my parents discovered I was letting him pee wherever when I took him out late at night.

As for Mikey, I usually let him pee wherever, of course not on lawn ornaments and the like but even if it's just on the lawn. I know people in my neighborhood do it ALL the time. It doesn't bother me. Mikey has sometimes picked up his leg on cars before though, and thank goodness nothing came out! If someone is standing outside I make him pee on the little patch of grass like Freedom, which is where he usually pees anyway.