To me, papers are very important.
1. I'm a bloodline nut! I have a huge interest in the bloodlines, lineage, prepotency (sp?) etc. of my chosen breed, Australian Stock Horses. I trawl the online studbook, following lines, picking family traits, etc. What crosses well on what, what doesn't, what lines are good for working, what lines are good for hacking, jumping, etc. I love it - and only registered horses can give this to you. I love ebing able to rattle off my horses ancestors and tell you what they were good at, what other progeny they have, etc.
2. I show in breed shows exclusively. For what I do, you CAN NOT do it on an unregistered horse - The classes my breed shows in are exclusive to registered horses of this breed.
3. Genetic traits and predispostion. By knowing the bloodlines of a particular horse you can get a better-than-average idea of any genetic issues, and what discipline the horse might be predisposed to. I wouldn't go buy a Kiawana Lunchtime Serenade horse if I wanted a working horse, I would go buy a Cadabra horse or a Chevin Ivory horse or a Hazelwoon Conman horse or an Acres Destiny horse. You don't get that with a grade horse.
4. Easy tracing. Through the breed organsiations you can trace the horses previous owners. I have contacted and talked to every one of Bundy's 4 previous owners, from his breeder, to his breaker, to his first rider, and then the lady I bought him from.
5. Acurate records of age.
6. Acurate performance records - My breed association maintains records of the horses performance.
7. Resale. I buy and sell horses - Not quickly, but a few years down the track. You will always get a better re-sale value on a well trained registered horse than a well trained grade horse.
8. Brands and recording of brands and markings. Makes a horse easily traceable if you sell it or it gets stolen, etc.
I've owned grade horses. They were fine horses. I don't have anything against them. But for what I do and what I want, I won't buy anything but a registered horse. And if I breed in the future, I won't breed anything but a registered horse.