It's important for psycho sexual emotional development.
Because, at an age appropriate time, when the child has the capacity to manage the realisation and with our support, a child has to learn that the parents relationship is not something that he or she is part of.
That he or she is not in a special couple with mummy and daddy but rather mummy and daddy are the couple. I think before this realisation a child feels like the world exists in relationship to him or her.
I am in a special couple with mummy. We are the same and she feels about me like I feel about her. I'm also in a special couple with daddy. He feels the same about me.
It's a shock when a child gets the dawning realisation that the real coupledom is going on away from him. Mummy and daddy's main emotional and love interest is in each other, not him.
This is very painful - we all know what it feels like to feel left out! - but necessary developmentally.
Once the child can accept this truth it frees them up to go on developing- looking out into the world to school and peers- and one day to being in a mature couple themselves. It also helps the child to solidify their identity and sexuality.
If a child doesn't really navigate this developmental leap then psychically a person remains forever "in his parents bed".
It gives rise to all sorts of psychological and emotional difficulties which you then see in adults. Of course the adult is often very mature and functional, responsible holding down a job and family. But somewhere deep down there are areas of the personality and mind which are quite undeveloped.
In order to develop the ability to reflect on things, to think about things rather than simply rushing to act on anger or rage or depression, you have to be able to take a mental position of being outside yourself looking in.
When a child sees that he is outside his parents relationship he has an experience of being on the outside looking in and observing. It starts to create what you might call a reflective capacity in the mind.
People who have well developed reflective capacity are good at taking themselves out of a high affect situation - rage, disappointment, frustration etc- and being about to think about and contain it without simply being overwhelmed (as a toddler would be - toddlers have little reflective capacity).
People with well developed reflective capacity are good self regulators. They tend to have strong relationships because of this.