Question
Is applying used coffee grounds a good way to acidify the soil for an azalea,planted in the ground, not in a pot?

Answer
Coffee grounds (used) are not a good acidifying fertilizer, and besides, it is too high in nitrogen and too low in phosphorus and potassium to suit flowering plants like azaleas.

Coffee beans are fairly acidic, and so is the beverage you consume after percolating water through the beans. Almost all of the acid is water soluble and thus is extracted during brewing. Used grounds have essentially neutral pH. Besides, it appear to have a very high buffering capacity, e.g. is capable of neutralizing large amounts of either acids or basic solutions. This means, if you add lots of coffee grounds (used) to the ground, it will be harder to reduce or increase pH afterwards.

Instead, I recommend products such as Hollytone (Espoma) or Cotton seed meal. Both are highly acidic. You can also dig in some peatmoss sphagnum into the planting hole (about 50% by volume).