In my engine class we degree 12-16 camshafts a year. I have a data pool of about 30 years worth, all kinds of engines. These are approximate results from all those engines. About 1 out of 10 engines are within 1 degree of perfect. +- 1/2 degree. About 6 out of 10 are within 2 degrees. +-1 degree. about 2 out of 10 are within 4 degrees. +- 2 degrees. About 1 out of 10 is off more than that. The worst Pontiac engine I have degreed was out 14 degrees. It was all in the timing set. This was over 20 years ago and it was a cheap "Wolverine" timing set. No idea if they are still around. I tried it several times and after giving up in frustration, I installed a used timing set I had laying around as a test. It came in within a degree or two. So the keyways in the "Wolverine set" were off by a bunch. That was a real outlier.
As far as effects: In a street Pontiac engine 400-500 HP, I doubt most people would notice a 1 or 2 degree variation in cam timing. Engine may be a little soft at lower RPM's if retarded 2 degrees. People with a well calibrated "butt dyno", would probably feel a slight difference at 4 degrees. So is the process absolutely necessary? Not really.
But it is part of doing a really nice engine assembly. Part of "blueprinting" an engine. As part of the process, most engine builders verify the opening and closing points of the intake and exhaust valves and the lobe lift. Along with setting the intake centerline right where the cam grinder expects it to be. More peace of mind for the best finished product.
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