In terms of smithing quality, it means that the smith took the extra time and effort to work in a small, but appreciated, characteristic into the knife. Because most knives are forged from flat square stock, once hammered out, the spine is usually left around the same squareness as it started (vs the highly worked edge side, obviously). The squareness can be a quick indication of quality especially if it's a cheaper knife that was stamped in a factory press where quantity and efficiency matters more over quality. A square spine isn't the end-all-be-all of quality, just a small bonus for some.