Does dermatitis cause anything really bad if untreated?

Possible. Dermatitis (another name for eczema) is not inherently dangerous, but it tends to itch, which makes it miserable. Constant scratching leads to infection (impetigo), bleeding, and scarring. Since most types of dermatitis can be easily controlled by a dermatologist, it makes no sense to take those risks by leaving the condition untreated.