Will a default be pretty? Absolutely not. But is it necessary? Yes. Austerity must be stopped and Greece has to default if it ever has any intention in recovering from this depression. Things have to get much worse before they get better, but better to do it now then live on the lifeline of the bailouts.
No, a Greed default would not be disastrous, because it is a small country and would not have a large effect on the rest of the world. Throughout history, economies have risen and fallen, and countries have risen and fallen. Each time, the country either rebuilds, or another nation rises to power. There is no need to panic because this is happening to Greece.