In a .vimrc, is `set nocompatible` completely useless?

Question

Several users in this epic question put the following in the .vimrc:

\" Necesary for lots of cool vim things
set nocompatible

Answer 1

I was using vim in Cygwin on a Windows VM and every time I was in Insert Mode, pressing arrow keys would result in vim printing "A", "B", "C" or "D" on the screen instead of scrolling. I found a forum that said putting vim in nocompatible mode would fix it. Thankfully, it did.

I put "set nocompatible" in my ~/.vimrc file and the problem remains gone. So perhaps it's not 100% useless.