To encrypt anything, you need to exchange the keys. Without knowing that you are exchanging the keys with the actual server (the host), you might end up exchanging keys with an attacker. So if you do not verify the host key, you are potentially encrypting the stream using forged key owned by the attacker. So the attacker can decode the stream.
This is analogous to a web user accessing a web page via HTTPS. Only the server end of that connection is authenticated via protocol. The client end is generally not.
With SSL, you have certificate chain, so you get a warning, if the certificate is not backed by trusted authority. There's nothing like that with SSH.