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Having a general answer on this topic is difficult as each case has its own definition. As well it is always an open debate between the business and the technical as each my vote towards his understanding.
It is based on the organization structure and strategy. large organization will require both domain knowledge as well as the required technical skills while small organization may agree on catching up the domain knowledge later on.
At the end, if the technical does not meet the business requirements and doesn't provide a service effectively and efficiently, it wont be consider successful. Now a days, it is very important to know the details of the requirements and meet customer satisfaction, internal or external, and these requirements are becoming more specific to the industry thus a domain.A service may be very valuable in one organization but of no value in another.
Understanding the domain will allow you utilize skills and techniques to deliver the requirements in a more effective and effecient manner, acceptable cost, minimum rework, change and less risk.
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