While the East Coast vs. West Coast feud that may have led to the deaths of Biggie and Tupac has died down, and cross-pollination of styles has blurred the previously more rigid distinction between the coasts, Yes this distinction still matters because it is a convenient way of discussing certain elements of style in hip-hop.
(Note, the following contains generalizations. There are many notable exceptions)
As background, the feud began because rappers from NYC, the original birthplace of hip-hop, felt insecure about the way the west coast was quickly rising in status in the rap world, especially following a succession of notable releases by Dr. Dre, Snoop Dogg, and Deathrow Records. Diss tracks were released as a way of insulting the opposing or defending one's own coast's style, but these quickly escalated into personal attacks on records, then physical altercations. The media's sensationalizing of the feud fueled the fire leading to more diss tracks, and more violence.
East Coast hip-hop (which at the time of the feud essentially meant NYC hip-hop) is commonly thought of as more focused on literary devices, and figurative language, with the beats from the area being harder, more minimal and atmospheric, and recreating the more claustrophobic feeling of being on the hard NYC streets filled with ambient sound.
West Coast hip-hop is commonly thought of as more style and attitude-based, with an emphasis on flow or syncopation, more lush, orchestral beats featuring hooky samples and conveying a more relaxed, though not necessarily less 'gangsta', living situation created by the lower population density and climate.
These distinctions allow one to efficiently, though also vaguely, describe hip-hop. For instance, I might say that B.o.B. of Georgia has a more "west coast style" because his strengths lie in how his syncopation and flow ride over complex beats but, while Wale of Washington, DC has more of a "east coast style" because he primarily trades on his wordplay.
For more on the technical elements of hip-hop, see Leighton Wallace's detailed answer to:
What does it mean for hip hop lyrics to be "technically impressive"?