Depends what you want to believe. I make bats and the two bats I have made for myself are Grade 2s. I could have selected higher grades from 100 clefts, but I personally don't feel they perform better. If you go into Grade 4 territory and below, you might get larger knots, hard bars etc which can affect performance, but 1 to 3 I'd say you're paying for aesthetics.
As with everything, you pays yer money etc. Margins are better with higher grade bats, so maybe that's why some will say they perform better. Maybe they feel they do, maybe not. I can't see how anyone can tell you with absolute certainty just how good a bat will be, just after it's been made and not even played with. Part of the reason I've never understood the 'Graded on performance' model personally.