It certainly is not regarded by most language teachers as important. Latin and Greek prose composition, which required students to produce original text (even if as a pastiche of Thucydides or Caesar) was huge a century ago, and I get the impression is extinct now. There are some ancient Greek text books that trying to teach the language like any modern language, immersively and with students conversing in the language before reading it. But they are in the minority.
Is the contemporary avoidance of production correct? My hunch is, you have a slightly better understanding of the nuances underlying syntactic or lexical choices in passages, if you yourself have had to go through them in language production.
But it is only a slight advantage, and most people learning classical languages now probably don’t need that level of nuanced understanding anyway. After all, they can always read one of the many translations around if that’s what they’re really after.