As a case in point, consider the two movie adaptations of The Scarlet Pimpernel—the one made in 1934 with Leslie Howard and the one made in 1982 with Anthony Andrews. The films are very similar in their telling of this classic story, with the exception that the much longer 1982 version includes almost a full hour detailing Sir Percival Blakeney’s courtship, marriage, and subsequent discovery of his wife’s apparent treachery against a doomed family of French nobles.
In the 1934 version, these events comprise the backstory and are related only in bits and pieces throughout the body of the film. And, in my opinion, the earlier film is the stronger of the two because of this very thing.
Aside from the fact that allowing backstory to function as backstory streamlines your book to much a greater degree, doing so also allows you more leeway to bring the readers in as partners in your storytelling. If we can involve their imaginations in helping us tell the story and fill in the blanks, half our battle in engaging their interest and emotion is won.
The ballast provided by backstory gives our stories greater depth and meaning and opens up the potential for interpretation. If we turn too much of our backstory into the story or illustrate too much of it via detailed flashbacks, we rob readers of the sense of weight given by the 7/8th of the iceberg floating under the water of our stories.