For bulk shippers the USPS will penalize you if you have... well it was not bad addresses but non-standard addresses. The mail order company I worked for a few years ago put more effort than I expected to normalize and verify addresses met USPS standards. So I guess the penalty made it worth it.
It is the AddressesV3 service. We're planning on using it (for the website redesign) to make sure that the addresses are correct (enough). There's a significant number of people who register and quit/get fired, yet still have to make one final filing (for a state government agency) that we snail-mail them a final "I'm done with this" paper form to fill out. And every couple of years an envelope gets returned as "undeliverable".