In short when a user searches out a term seeing it reflected back in the ad copy and landing page makes it all stick better. This is especially true when you consider campaigns with fairly diverse keyword clusters and the word currently used is significantly different than the one the searcher has typed in.
Automation is simply the process of doing the insert on the fly using referral data rather than building out different keyword specific pages.
Of course it's not all perfect and showing a keyword back can create a mismatch like when someone types in a phrase but clicks on an ad related to just one part. Having the text show back just doesn't seem right all the time and with automation it becomes more of an issue.
As far as the value, well, it depends on how you setup and manage your campaigns as well as how large they are. If you have separate landing pages for tight clusters of keywords it may not be worth testing at all but if you're like most companies and group similar meaning, but different actual words together and are running campaigns frequently, testing it is a good idea.