It'd still be a loss of face for the Chinese government. They decided ages ago that their policy would be to treat Formosa as a rebellious province. If they back off that now, how do they treat their other provinces who want out?
And to why it's such a big deal, check out the ROC's GDP, their South China Sea claims, and where they sit off the coast. All of that could be the PRC's.
problem is, no other provinces really want out (except maybe Tibet and Xinjiang, but they were never really part of China until the mid-20th century), especially with the economy booming as it is. China's doing well now; a lot better than it was 15 or 20 years ago, and the leaders in Beijing aren't going to mess that up by trying to retake Taiwan.