Squash and stretch is extremely important in animation! It is used to convey weight, density, and even the concept of motion blur! In the bouncing ball examples below, the top ball has no squash or stretch at all in its motion, which will produce a ball that looks like a bouncing bowling ball. But in the bottom example, the ball is stretched as it heads down toward the ground - giving the illusion of fast movement and motion blur - and then squashed when it hits the ground to give the illusion that the ball is flexible. This also produces animation with more weight and dynamism than just keeping the ball the same shape and volume through the entire movement.