OAuth allows you to authorize a third-party service to control your SmartThings devices, or even just get information from them.
Whether you need that or not just depends on what you’re trying to do.
For example, I myself am quadriparetic, use a wheelchair with limited hand control. For that reason, voice control is very important to me. SmartThings doesn’t come with built in voice Control.
In the United States, we can buy the Amazon echo and there is a great official integration with SmartThings. However, it requires basically authorizing Amazon to turn on your SmartThings switches.
Of course, Amazon is not yet offering echo in the UK. However, there is still a voice alternative, which is to send voice texts to IFTTT, and have that trigger the SmartThings devices. I used this myself before Amazon was released in the US, and I have several online friends in similar circumstances to myself in the UK who were waiting for SmartThings so they could use this method. However, since Oauth is broken for the UK, they can’t use IFTTT, which means they have no voice options.
Other very popular third-party services include a dashboard tablet app that lets you see the status of all your devices, a widget app that lets you add control widgets to an android device, and even some thermostats and other Wi-Fi connected devices.
Some people also connect devices like Wi-Fi scales or coffeemakers that have their own cloud services.
Even the most recent official blog from SmartThings highlighted weatherbug, a weather service that also requires OAuth.
And then there’s Logitech Harmony, one of the more popular universal remotes, which has an excellent official integration with SmartThings to let you, say, have a motion sensor turn on your entertainment devices. Works very well for current US accounts. Unfortunately, without OAuth there is no way to give harmony permission to get the information from the sensors associated with your SmartThings account.
Essentially if you have a service that requires you to sign into a website and you want to be able to connect your SmartThings devices to that service, OAuth is the typical process that validates your account to share information with that service. It doesn’t work with all websites, just ones that have prior arrangements with SmartThings, but it is the authentication mechanism used for many of those agreements
So some people will find it very useful, some people will find it fun but not that important, and some people won’t need it at all.