As Ben Webster points out, it is not entirely pro forma (I know a couple of people who did not get their contracts renewed). I agree with his points, but here's another aspect:
In departments where tenure denials are common, it's extremely valuable to get a preview of how strong the letters will be. If they aren't compelling enough, the department will probably still renew your contract, but they'll warn you that tenure isn't likely. This gives you several years to find another job, which is valuable because job hunting is more difficult after a tenure denial: universities that might have been interested when they thought they were competing with University X may not be as excited about taking what they perceive as University X's rejects. So the information from the reappointment process may be very useful in ways that are intentionally invisible from the outside.