Mercutio's repeated line, "A plague o' both your houses!," is important because it curses both the Capulet and Montague families but it also points out just how cursed they already are (III.i.90, 99-101). The fact that the repeated line is spoken by Mercutio is absolutely critical to the story as well in that Mercutio is connected to both families either as a relation or a freind. Hence, only Mercutio serves as the social bridge between the two families and now both families have killed that one social bridge.
The word "plague" can refer to any highly infectious disease that causes many deaths through an epidemic. It can also refer to any "evil" that one can use to hurt another person with, therefore, we can think of a plague as a curse (Random House Dictionary). Hence, one thing that Mercutio means when he says, "A plague o' both your houses," is that he is cursing their families. We see this curse come true when both Romeo and Juliet later die in the story. As Prince Escalus later points out, God has punished Lords Capulet and Montague for their hatred by taking away what they both loved (V.iii.303-304).
Since a plague is an infectious disease that causes many deaths, we can also say that through this line Mercutio is pointing out what he already sees as true, that both houses are already cursed due to their hatred and prolonged feud. He is pointing out that their hatred is an evil that has already shed a great deal of blood and is likely to shed even more, which it does, as we see.
Finally, this line is especially important because it is spoken by Mercutio who serves as a social bridge between both Capulets and Montagues and even other citizens of Verona. Mercutio is Romeo's best friend; however, we also learn that he is either related to or a close friend of the Capulets because Lord Capulet has invited him to his feast, as we see from the line in the invitation list Romeo reads that is handed to him by Capulet's servant, "Mercutio and his brother Valentine" (I.ii.70). Not only that, Mercutio is also a family member of Prince Escalus's as we see Romeo proclaim when Mercutio is slain:
This gentleman, the Prince's near ally,
My very friend, hath got this mortal hurt
In my behalf. (III.i.109-111)
In this passage the term "ally" can be translated as a relation, especially through marriage (Random House Dictionary). Hence we know that Mercutio is also a relation of Prince Escalus's through marriage. Not only that, we also learn later that Mercutio is a family member of County Paris's, which we learn after Romeo slays Paris at Juliet's tomb and cries out, "Let me peruse this face. / Mercutio's kinsman, noble County Paris!" (V.iii.74-75). Hence, we see that Shakespeare has very intentionally made Mercutio a relation, either as a friend or a relative, of every major character in the play, creating a social bridge between the characters, especially the Capulets and Montagues. Mercutio's death and his pronouncement of the plague show us just how much death and destruction the feud is causing.