CNC (and mfg in general) will have different tolerance needs. And the flex on this machine will depend on the material and work speed.

I'd probably argue that anything worse than 0.5mm (~20 thou) will start giving you headaches if your making parts that are supposed to interact with each other. That said, if you're making basically oneoffs and are willing to handfit, that tolerance is probably tolerable (ha!).

It's not hard to make a mill that can cut shapes into a block of styrofoam. If I stretch I can maybe imagine some industrial uses for a styrofoam-only CNC mill. (Moldmaking?) But what would a regular consumer use it for?

"Serious" just means the ability to cut more useful materials, like wood or steel.

Serious = harder (hence more useful) materials. As it stands I would say only materials that could be cut with a pair of scissors (card, foam) could be used on this safely without frustration.