Galactic readiness applies a multiplier to your war assets. 50% Readiness means you're going into the final battle with (War Assets x .5), effectively halving your strength. Or something like that. It's probably not that severe, but it is significant.
This is why people were a bit upset about MP's effect on SP. You're forced to play, or do every possible side quest to avoid the bad endings.
edit: Also that the number drops by 1% per day below 80%, and substantially faster above 80%.