Relegation would be a nightmare financially for the club and could put us in an even more precarious position than we are already in re: continuing trading at a loss.
On the playing front, it could also be bad for us. The Championship won't be a league we'd go into expecting to win it, or necessarily even be promoted from it via the playoffs. And a prolonged stay would be very damaging to the club's core support as people get fed up and find other places to be. Apathy sets in and crowds may never recover. There may be some initial buzz amongst supporters for the start of a new season in a lower division, but it almost certainly would not groundswell and would be the same core of folk who go anyway. Then once they see a few months of games and realise we aren't handing out spankings to the opposition every week the crowds would dwindle further from the those who had already been disillusioned by the relegation.
Put simply, yes, relegation would really be that bad.
Sadly though, it's out of our hands as supporters and all we can do is hope for the best for the rest of this season, see how things pan out and if we go down then we try and make the best of it.