Curious, how do YOU check valve guides with the "wiggle" test?

The .017" is for the valve up out of the hole about like we are talking (see the illustration posted by Mopowers). Valve to stem clearance will be somewhere around 1/2 of the total wiggle for most engines/heads of this era, so I would guess a wiggle at the valve head of .017" is about .008" valve to stem clearance.

Compare this to a stock new tolerance of .001-.003" for intakes and .001" more for exhaust and you can get some idea of how sloppy loose service limits can be.... Service limits for piston to bore clearance are often up in the .008" range, and service limits for a /6 chain give you about 5* of cam retard! So for any performance use, service limits are IMHO not at all appropriate.
As for overall performance, it it not a matter of professionalism; it is a very real detractor from performance and durability. Using wide valve-to-guide clearances do indeed result in erratic valve seating (acting similarly to worn rings and grooves) and fast seat wear, as YR indicates. It is just gonna get worse as you put in a bigger cam and struggle with idle vacuum, etc. I rank it just as important as a good ring seal if you are after performance.

I often have knurled guides to get a a tight guide for a while when I was cash limited, just to make things run better. So that is one alternative to the cost of new guides. Guys who runs shops for local circle track racers do this regularly in my experience; they are dealing with guys who race on limited budgets and need to get the engine as much up to snuff as as possible in a short time and for little $$ and for a few months of racing. It is a practical solution, albeit for a limited term.