To say 'No' is to learn to set boundaries correctly - to distantiate ourselves from the others.
The toddler is realizing he is not part of the mother anymore ; it is starting to become independent
This is very useful, and not knowing how to say 'No' will otherwise become a potential pain in the growing teenager, then adult
Why?
Because a functioning adult that is unable to say 'No' will be influenceable, will be constantly taken for granted - sure, he will appear to be kind. But inside this adult will feel like he is drained all the time, and most of his friends will noticed that he does not seem to have a personality.
And one day, he might explode in burst of angers, shouting after everybody - because he had enough.
This burst of anger are the sure signs of a long period of silent acceptance, silent resignation and many 'Yes' that should have been 'No'
The 'False Yes' is the worse ; and we all experienced it
When asked if a friend can stay over for a night, but then stay for a week
When asked to help moving a couple of friends, while we know we had to take care of sorting out some business first
When going on a vacation with a couple of other friends, but we found ourselves paying for all the notes...
Having clear boundaries is the basis of an adult life