As long as the paper is halfway intact, drywall is very difficult to remove and provides significant strength to a wall. It’s a composite material, and excellent fire barrier.
It’s really obvious when it’s up compared to not.
It’s not as much as lathe and plaster, but lathe and plaster is extremely difficult to work with in every other way, and far more labor intensive.
Plywood on a wall is important for shear strength, but lathe and plaster doesn’t replace it. Properly designed earthquake resistant shear walls became a thing long after lathe and plaster were phased out.