the typical groove dimensions i use are .025 deep and no more than .050 wide. it should be done with a radiused tool, not a square tool with sharp 90 degree edges.
i would never make the groove as wide as the hole in the cam bearing since they are typically 1/4" (.250") wide. that's way too wide IMO

i would also wonder why you think you need to groove the cam, unless it's a Hemi, which should already be grooved.