This verse is of particular importance because St. Jude uses it in his letter to establish and defend doctrine. The individuals whom he is writing against are apparently claiming the ability to revile celestial powers; Jude points out their arrogance and error by authoritatively calling upon this oral tradition which records that even the Archangel Michael was humble enough not to rebuke Satan himself but only to call upon God to do so.
For comparison, here is the wider context of this verse, in which St. Jude includes some references to events that are recorded in Scripture:
“But I want to remind you, though you once knew this, that the Lord, having saved the people out of the land of Egypt, afterward destroyed those who did not believe. And the angels who did not keep their proper domain, but left their own abode, He has reserved in everlasting chains under darkness for the judgment of the great day; as Sodom and Gomorrah, and the cities around them in a similar manner to these, having given themselves over to sexual immorality and gone after strange flesh, are set forth as an example, suffering the vengeance of eternal fire. Likewise also these dreamers defile the flesh, reject authority, and speak evil of dignitaries. Yet Michael the archangel, in contending with the devil, when he disputed about the body of Moses, dared not bring against him a reviling accusation, but said, “The Lord rebuke you!” But these speak evil of whatever they do not know; and whatever they know naturally, like brute beasts, in these things they corrupt themselves. Woe to them! For they have gone in the way of Cain, have run greedily in the error of Balaam for profit, and perished in the rebellion of Korah.” – Jude 5-11
We can see that St. Jude references the traditional story of the Archangel Michael contending with Satan no differently than he references the Scriptural stories of Sodom and Gomorrah, Cain and Abel, the Prophet Balaam, and the rebellion of Korah; he clearly regards them as having equal truth, authority, and status.