The fine particles have a negative effect on the engine and the lubricant. It's mostly about the volume of them. An engine pumps a lot of air and if it's laden with fines, you can get a high rate of oil contamination (past the rings into the oil and fines get past the rings faster and easier). In the oil, it's the contamination levels that is partially (if not mostly) dictate how much harm is being done. The fines are often too small for a normal full flow filter to catch a high percentage.
Some people live in area with relatively clean air or in an area where the fines are uncommon and they do just great with a low efficiency filter. Oiled cotton gauze filter in general, certainly K&Ns, are in what is generally considered by the automotive industry the "adequate" efficiency range. They vary somewhat depending on how many layers of gauze are used. The K&N filters that use three layers (most are two) have increased restriction but better efficiency and vice versa (I am not current on which have two or three layers... not many are three and they are designed for HD use IIRC). All the passenger cars filters I know of are two.
My take on why this is important now is that when the K&N was designed, air filters were either inefficient and restrictive (oil bath) or just restrictive (early cellulose). Plus the intake systems were inefficient ant cost power due to restriction. A K&N was a great boon then to almost anything and the filter efficiency was on par with the OE and the aftermarket. On top of that, the OCIs were 3K or less, the old flat tappet, Morse chain, poorly machined engines shed lots of metal... so what did a little extra dirt hurt.
Today, engines run cleaner, contaminate the oil less, shed drastically less metal via normal wear (in most cases, there are exceptions) and so they can run longer OCIs at lower levels of contamination than ever before. Lubricant design has improved enough to drastically reduce wear. Air and oil filters have improved so that they can maintain the oil at a high state of cleanliness. There is little power to be gained with a free flow filter so all you are doing by introducing a lower efficiency air filter into the equation is to potentially contaminate your oil faster, increase wear and shorten oil life. It won't be by a lot, unless your daily commute is akin to the Baja 1000, but you may have taken several backwards steps. Depends on your locale.
Also, OCG filters are fragile and vulnerable to improper cleaning. Clean it wrong and you could go from 94% efficiency on fine test dust (typical) dust to 60%.