He's probably the most important defender in the Cavs. In a vacuum, LBJ is better, but Varejao fully dedicates himself to defend, unlike LBJ who often takes an easier assignment or coasts for a few possessions here and there. So his actual impact is even bigger than James'. Plus, he's their only big who can defend.
Cleveland has been a good defensive team for the last few years. They declined a bit this season but were still good. Even though:
Shaq - Awful defender
Mo Williams - Awful defender
Jamison - Awful defender
Z - Awful to very poor defender
Hickson - Very poor to mediocre defender
Gibson - Very poor to mediocre defender
Parker - Mediocre defender
Moon - Average defender
Delonte West is the only above average defender in the Cavs rotation besides Varejao + LeBron and yet they still manage to be a good defensive squad.

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