I don't like this style at all. If you're following the pipeline, it starts in the middle with "input", goes to the left for the grep, then to the right (skipping over the middle part) to sed.

     cat input | grep '^x' | sed 's/foo/bar/g'

Is far more readable, in my opinion. In addition, it makes it trivial to change the input from a file to any kind of process.

I'm STRONGLY in favor of using "cat" for input. That "useless use of cat" article is pretty dumb, IMHO.