Bite inhibition is important because it could prevent accidents in the future. Sometimes dogs have an instinct to bite (such as a kid falling on them, or a vet handling them in sensitive areas). If taught properly as a puppy, it will make your life a LOT easier.

Here's some more information I found:

Play biting by puppies is very normal, and recent studies indicate that it is far better to teach a pup about bite strength, and just how hard human skin may be manipulated. Considering puppies have needle-sharp teeth, this can be a necessity. We can suppress biting by adding a punisher, but do we really want to?

A dog is an animal made to bite. Their teeth are perfectly made for ripping and tearing skin, cracking bones. Dogs are not born with "soft" mouths, but the can learn to have a soft bite with the right feedback about how hard they can bite human skin. If we suppress all biting, then in stress, how will the dog react? What works for service dogs works equally well for the companion dog, the well-mannered pet.

We don't ever want that puppy or adult dog to bite the vet who must administer an unpleasant shot, but if it happens, isn't it better that that response will not puncture or bruise human skin?

The puppy who is forbidden to play-bite by owners is the puppy who has no feedback about his own jaw strength, and who may grow up to have a "hard" mouth. Jean Donaldson states in "Culture Clash" that "This is a serious squandering of a critical line of defense against dog bites. Puppies who do not play bite should be actively encouraged to do so in order to develop a soft mouth."

Biting is normal for puppies. If they have been properly stimulated and socialized within their litter, the littermates and dam will give them their first lessons in bite inhibition, letting them know how hard they may bite other dogs. Our job is to continue the work and teach them how hard they can bite human skin.

We do this by not suppressing the biting, but shaping it. We allow puppy to nibble, and when he nibbles too hard, we screech, "Ouch!", and turn away from him for a few seconds, removing what he wants the most: our attention. The "Ouch" becomes a conditioned stimulus which tells the dog he is receiving the consequences of his jaw action. The "OUCH" becomes the "marker", the deliverer of information.

If, each time he bites just a bit too hard, we do this, then the pup soon learns that only very soft, gentle mouthing is acceptable on human skin. And no matter how wound up he gets, from the point that this lesson is learned, generalized, he will never break human skin.

Once the puppy has learned a modicum of control on the intensity allowed of biting, then you can begin shaping the more moderate bites as well. Jean Donaldson, author of "The Culture Clash" explains why it's important to do this in stages:

"The reason for doing it in stages is that the puppy will be unable to comply if you set too high an initial criteria. He's got to be able to manage the task you set before him. Little biting-maniac puppies can and do learn to hold back on the hard bites, but they are simply unable to hold back on all or even most bites too early on, unless you obliterate the puppy with harsh punishments."

At this point, when the puppy is putting only very light pressure on the skin, it's ok to teach a "no bite" cue, and redirect his biting to other objects, such as his chew toys. He can now learn that it's not acceptable to bite human skin, but he also has learned that if human skin is EVER bitten, for any reason--even for fear reasons, that it must always be a very light bite, never a skin-puncturing one.

But like all behaviors, it has to be kept up and reinforced through to adulthood. Jean Donaldson recommends hand feeding exercises, where the human holds a bit of food between their fingers and the puppy must nibble to get the food. If the puppy nibbles too hard, the human screeches "OUCH" and does not give the food to the dog. This reinforces that no matter what, only a certain amount of bite pressure will ever be tolerated by the human.

Jean also advises teaching the pup to play tug early on. And to use the same type of screeching "OUCH" marker when the pup accidentally chomps on your hand instead of the tug toy, when wound up. If the owner also establishes a release cue, such as "Out" or "give" early on, the tug game becomes a marvelous way to reinforce lightening-fast release responses.

Keep in mind that wild and manic biting can also indicate an under-exercised dog. A tired pup is a good pup. If the dog won't settle down, he may need far more exercise than he is getting. Make bite inhibition just part of the normal daily shaping exercises, but be sure to include lots of physical exercise to burn off all that puppy energy!

More mature dogs, such as rescues, should also be taught bite inhibition, though it may need more proofing during stressful times, and the default may not be quite as reliable.