It's interesting how so many important papers are always on arxiv first. it makes me wonder what purpose peer reviews serves. I think also, this is to help establish priority over the result. So getting it up on arxiv is like a timestamp to avoid someone else deriving it at the same time and getting credit by having it published first.
Peer review is important for checking the correctness of the results, among other things. It's not uncommon to find big errors; small mistakes are everywhere.
The purpose of the (pre-print) arChive is to allow for a wider circulation during review. That many today simply leave their stuff on Arxiv without publishing is arguably a bit of “cargoculting”, as it signals legitimacy without any quality control.
Peer review is of utmost importance. Any researcher can make mistakes. I can read papers and apply them, but I need expert opinion to trust the papers. I am not skilled enough in any but my specialties.
I do see papers with outlandish claims and very weak support. This kind of excessively bold statement I see in many papers is a red flag for me.