Over the past few months, I re-read J.R.R. Tolkien's The Lord of the Rings (and I'm still making my way through the appendices). After finishing each of the books, I watched the corresponding movie (I have only the extended versions though). I'd seen The Fellowship of the Ring and The Two Towers before, but this was the first time I'd seen any version of The Return of the King. I was surprised and a little disappointed that there's no Scourging of the Shire in the movie version. It's an important part of the book:
This rest of this post contains spoilers for The Return of the King (the movie and the book).
1. Without the Scourging of the Shire, Saruman doesn't seem as powerful of a wizard. In both the book and the movie, he's held captive in Orthanc. In the book, after Gandalf and company talk to him, he remains alive and captive, with Treebeard and the Ents watching over him. Later in the book, Gandalf learns that Saruman used his persuasive voice on Treebeard, who's let him go. Saruman then leads a band of ruffians in an invasion of the Shire. In the movie, he's killed by Gríma Wormtongue after Gandalf and company come to talk to him.
In the book, Saruman evades his imprisonment and starts over in amassing power. In the movie, he's just stabbed in the back. (He's killed the same way in the book, but it comes much later, after the Scourging of the Shire.) He's disposed of too easily in the movie, where, in the book, he presents more of a threat.
However, I do like the movie's treatment of the palantír more than the book's, and the nature of Saruman's death allows for it. In the movie, it falls out of Saruman's pocket after he falls from the tower after his death; in the book (in Chapter 10 of Book Three), Gríma throws it at Gandalf as "a parting shot." Gandalf even admits that "if we had entered in, we could have found few treasures in Orthanc more precious than the thing which Wormtongue threw down at us." It seems too contrived in the book.
2. The lack of the Scourging of the Shire in the movie also makes Sauron's power (and the war that he's started) seem limited in a way. I think that in the movie version of The Two Towers Merry says something about there not being a Shire anymore if the Ents don't go to war, but it remains hypothetical. In the book, the characters actually encounter the war's effect on the Shire. The Scourging of the Shire shows that the Shire is a part of Middle Earth and can be - and is - affected by evil (evil that's either a direct result of Sauron or a side effect of the war against him), but in the movie the Shire is shown more as an isolated utopia. In the book, it's able to remain temporarily separate from the rest of Middle Earth because it's under the protection of the rangers, but once they leave to help in the war, its borders are left unguarded. I don't think that's fully explained or even present in the movie.
3. Finally, the Scourging of the Shire shows the changes that the Hobbits have undergone. They've all experienced battle (Merry and Pippin moreso than Frodo and Sam), so they're able to organize the Hobbits in the Shire to resist the bands of ruffians. Merry and Pippin are noticeably taller because of the Entish draughts that they've drunk, and Frodo's experience with the Ring and with Gollum is shown through his interaction with the ruffians and with Saruman. Multiple times he explains that he doesn't want anyone to die needlessly in the Hobbits' reclamation of the Shire, and he even tries to give Saruman a chance to redeem himself. He knows first hand what the Ring and evil can do to people and how it can twist them into doing things that they don't really want to do, so he tries to separate those effects from who's affected.
In the movie, it seems that only Sam has been changed through the experience. As in the book, he has the confidence to ask Rosie Cotton to marry him. But the rest of the Hobbits seem more or less the same as when they started the journey.
The movie is already pretty long, and adding the Scourging of the Shire would have only made it longer, but I still think it's an important part of the story that illustrates both the magnitude of power that the characters face and the changes that they undergo as a result of their journey.