Why is subject knowledge so important when teaching pupils?

To deliver teaching effectively and efficiently.

I agree with Saiful Islam, the more you know on the subject being taught the better it is to relay it to the student. You can rephrase, retell, reiterate it100 times in100 different ways and still would be the same. Breaking it down the material for the student to learn.

I would say the knowledge subject is crucial otherwise the knowledge tranfer process fails to run 

effectively and efficiently.

the speciality is needed because you will understand people easily and in a good way

It is dangerous to teach and transfer an erroneous information to the pupils, so its important to the teacher knowledgeable enough on it.