Configuring splitChunks with appropriate parameters is crucial for optimal code splitting because: 1) It allows fine-tuning of chunk sizes and generation rules, 2) Enables efficient handling of common dependencies through cacheGroups, 3) Optimizes caching by separating vendor and application code, 4) Prevents chunk duplication through reuseExistingChunk. The configuration shown demonstrates best practices like: setting minimum and maximum chunk sizes, separating vendor code, and reusing existing chunks where possible. This leads to better load performance and more efficient caching strategies.