Dummy text means you won’t see the inevitable variations that show up once real information is entered. It means you won’t know what it’s like to fill out forms on your site. Dummy text is a veil between you and reality.
You need real copy to know how long certain fields should be. You need real copy to see how tables will expand or contract. You need real copy to know what your app truly looks like.
As soon as you can, use real and relevant words. If your site or application requires data input, enter the real deal. And actually type in the text — don’t just paste it in from another source. If it’s a name, type a real name. If it’s a city, type a real city. If it’s a password, and it’s repeated twice, type it twice.
Sure, it’s easier to just run down the forms and fill the fields with garbage (“asdsadklja” “123usadfjasld” “snaxn2q9e7”) in order to plow through them quickly. But that’s not real. That’s not what your customers are going to do. Is it really smart to take a shortcut when customers are forced to take the long road? When you just enter fake copy in rapid-fire fashion, you don’t know what it really feels like to fill out that form.
Do as your customers do and you’ll understand them better. When you understand them better, and feel what they feel, you’ll build a better interface.