Validation is a sore issue. In XHTML days (pre html5 doctype ubiquity) it was almost impossible to validate a complex layout against the strict DTD published by the W3C. I think you could probably point fingers at IE for being the prime culprit, as so many totally non-standard hacks were needed to make it behave in a reasonable cross-browser way, and IE was and is the most-used browser on the planet. It is to be lamented that MS, instead of following the lead given by webkit and gecko engines, have decided to add yet more browser extensions and hacks to muddy the waters, instead of going for plain adherence to the 'standards'.
We all know that if time were not an issue, we as developers could create pages that validate, but in practical terms, as the others have pointed out, validation ends up being a helpful tool not a defacto objective. If a client demands validation, then there is a cost involved, and that has to be explained - managing the expectations here is very important.
The html web advanced in very short time from being a very simplistic semantic text layout engine to fully dynamic applications running inside the browser, and the validation tools simply have not kept up with this. I'm not even sure they can, given that browser technology is advancing daily, across a thousand or more different platforms.
So - rounding up, it's a tool to be used by developers, but your own personal ability is what will determine if the project is fit to purpose or not. Having an icon or green 'ok' box in a validator is absolutely not going to define if a project fits this definition or not.
google.com
's error areobsolete
for instance, which just means they haven't yet progressed onto higher standards which is most likely because of backwards compatibility. Also note how the error count is actually pretty low and actually scales with the amount of components on the page, so they really do try to comform to the standard and they do validate their site to decrease the amount of errors where it makes sense... – Ashford