I forgot to add butter to my cupcakes but they were ok - why?
Butter (and basically any saturated fat) is added to cake recipes mostly as a way of adding texture to the final product. By adding the fat product to the recipe, you make the cupcakes light and fluffy. If you leave the butter out, it will affect the taste slightly and will cause the cupcake to stay smaller and more dense, as you noted, but it will still be perfectly edible and probably quite tasty.