Here I have compiled a few examples of how squash and stretch can work to help create the illusion of reality, a slightly exaggerated effect that helps to create much more vibrant and believable animation. It can also be used, especially in shows such as Ren and Stimpy for comic effect, to help exaggerate the physical punchline of a gag.
Hanna Barbera's The Flintstones uses a limited animation technique that lacks the squash and stretch of other cartoons of the time, and Hanna and Barbera's early work on Tom and Jerry. This creates much more rigid and less believable animation, however still suits the stylised, graphic approach.
Family Guy uses a similar limited approach to animation, and even here, with a long action sequence, the lack of squash and stretch is very evident. In terms of the action, the lack of squash and stretch results in a less engaging fight sequence, as the effect of acts such as punches seem to pull less weight and feel much less powerful.