It's a discount over the normal membership fee, so you might as well go with the LivingSocial deal if you were planning to join anyway.
We regularly buy a number of items at Costco for a discount over normal retail prices, including flour, sugar, cheese, beer, men's jeans, all types of soap, and more. The store also treats their employees well and is headquartered in my state of residence, so I like giving them my business when possible.