Many Chinese styles include sensitively training with what they call "push hands" or "sticky hands." Imagine that you have to feel for an opponent in the dark. As soon as you contact an arm, you grab it, twist it and pull back to your hip, pulling your opponent off balance (hikite). At the same time, you strike with the other hand, as now you know exactly where he is, even if you can’t see him properly.
Sakugawa was taught night fighting by Kong Su Kung and was introduced to the (then new) principle of hikite. Is it effective? Well I don’t know about hikite in isolation, but obviously White Crane Kung Fu was effective by the way that Sakugawa defeated a crew of pirates practically single-handed.
As an aside, many Chinese styles primarily use circular technique (using centrifugal force to generate power), which is good for grappling/throwing. And this would have been the way that Kong Su Kung taught Sakugawa. Sakugawa’s student, Matsumura developed linear technique (powered by forward body momentum) which is not quite so good for grappling.
Why would Matsumura make these changes? As Matsumura was chief bodyguard to the King of Okinawa, his main “battlefield” would have been the well lit Shuri Palace, where night fighting techniques would have been less important. As Matsumura and his men could be outnumbered, he would have been mainly interested in releases from grabs/holds/controls and in being able to put the opponents down as quickly as possible.
This means less emphasis on grappling (which can be a bit slow for multiple opponents who can all clearly see you) and more emphasis on powerful strikes that can incapacitate opponents very quickly. However, even with this change of requirements and the very fundamental shift in underlying principles (which really sets Karate styles derived from Matsumura’s lineage apart from its Kung Fu roots), he still kept the hikite intact. So he must have seen a lot value in it, even outside of the night fighting scenario.
[Note: Just out of interest, Goju Ryu Karate and its derivatives are not from Matsumura’s lineage and are more akin to Kung Fu with emphasis on circular technique.]