Why numerical analysts keep this one around
Runge's function, f(x) = 1 / (1 + 25x^2), is smooth and completely well behaved on [-1,1]. Sample it at equally spaced points, however, and a high-degree polynomial interpolant can oscillate badly near the ends of the interval.
That makes the example useful because the data are not noisy, the function is not discontinuous, and the polynomial really does pass through every sample. Nothing has gone wrong according to the interpolation condition. The unreasonable behavior appears between the points.
The lesson is therefore not 'polynomials are bad.' It is that satisfying the data exactly does not settle the modeling question. Node placement and locality matter.