I did a blog a while ago on Small Circles and how to teach it.
I think doing Small Circles is an important skill and rightly a required Junior maneuver, not so much for the circles, but for other things. However, as Nathan has pointed out in the blog comments, doing circles quickly is important in racing, if you're bad.
In Small Circles, there's a lot going on in a short amount of time, so it's a stress test of your sailing skills, your boat control, your weight balance, and your crew communication. Sailing a circle flawlessly (of whatever radius, but constant) is a challenge. One very good Club racer told me that one of the best racing exercise is doing lots of circles in a row, maybe 100.
But really tight circles is a different beast. It has all of the challenges above, but it requires some rudderless techniques to make the turns really fast and tight. My blog of a couple of years ago missed an important thing.
In the blog, I talked about how you do fast upwind and downwind turns, which to me is the real value of learning this. You might have to do either near the dock, combined with a tack or a gybe. But I glossed over the gybe itself, which is an important part of it....