"For the first option above, where the browser user logs in via a pop-up dialog, you must furnish the end user with a username and password that is recognized on the ArcGIS Server system and that is permitted for the service. You must work with the administrator of the ArcGIS Server system to ensure that end users have login information."
Enabling this setting requires that users of ArcGIS Server Web services provide a username and password to access services. The security store location chosen above determines how user credentials are stored and authenticated. Once security is enabled, it cannot be disabled using Manager.
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if you don't have security enabled for ArcGIS Server, what resource would require authentication from a client?