It is important to observe a person's reaction while you communicate with them and if you don't observe their reaction you won't know how they are feeling or what they are thinking about your talks inside! So that's why it's important!
Observation is one of the most important things when it comes to communication. In fact, it might even be the MOST important thing, but for some reason it is often downplayed and unfortunately sometimes forgotten about all together.
The reason why observation is so important in communication is that we need to gauge the reaction of the person we are speaking to in order to modulate our behaviour or regulate what and how we say things.
If a person is disinterested in your conversation and is clearly showing signs that they are bored or distracted, continuing the same topic means that you are just talking 'at' them and all communication ends at that point.
Further, how open and honest we can be with a person is something we must gauge through observation during a conversation.
Unless someone has an excellent poker face, generally people's thoughts and feelings are written all over their face, so we can learn from this that we may need to tread carefully over sensitive subjects and perhaps halt topics all together if we read from their reactions that they are uncomfortable with the nature of the conversation.
In summary, it is always important to be highly observant in communication.
I hope this helps.