Yes, the blade acts as a counter balance for the engine. The added inertia of the weight of the blade helps keep the engine tuning in the right direction when starting. The ignition is setup with a slight advance and without a blade or counter weight attached tightly to the crankshaft, the engine will kick back when you try to start. If the flywheel key gets sheared this will also cause the ignition timing to advance more, so you can get kick back on engines where the blade is tight, but the key is sheared.
You may want to make sure the crankshaft is not bent while you have it down to this point. Hitting something is what usually causes this type of damage to blade adapters.