Every time I walk into a chain grocery store I can be confident that some variety of shredded cheese will be on sale, whether it be a store brand or a brand like Kraft or Sargento. Buying shredded cheese is simply for convenience. The amount of flavor you are losing doesn't equal the amount of time you save. If you have a good cheese grater (see my post on cheese graters) then it won't save you that much time. When cheese is shredded it dried and loses some it's flavor. You also lose freedom of choice. Only the most popular cheeses are found shredded like the mozzarella and cheddar. But there are so many varieties of cheese out there than can be used for what you would use your shredded cheese for. For example, for macaroni & cheese I use to just use bags of shreddedsharp cheddar, but now that I just shred the cheese myself, I have used white cheddar, New York sharp cheddar, and New Zealand cheddar. All of these cheese brought a slightly different flavor to the table. Same thing with using brick cheese instead of shredded mozzarella. You don't see bags of Kraft Shredded Brick Cheese or New Zealand cheddar hanging in your grocery's fridge, now do you?
Some people might think these other cheese are more expensive, so I will save money by sticking with the bags that are on sale. From someone who use to buy these bags, I know that often I got them on sale for $2 for an 8 oz bag. Sometimes they were cheaper but I would bet that the majority of the sales were $2 sales. The cheddars I mentioned above I found at different stores on sale or at their regular price for $3.99 a pound. Thus 8oz of that cheese would cost me right around $2. So I am still paying right around the same price.
I am all for saving time in the kitchen (that's why I am getting a dishwasher with my tax return money this year) but I never do it as the expense of flavor. Taking 5 minutes or less to grate a block of cheese is worth the time and the effort. It will show in your end result.