The effects of difficult people vary depending on whether they are co-workers, subordinates, or your boss.
Difficult subordinates affect your ability to get your job done. Doing their work as well as your own doesn't solve the problem; it simply drains energy and focus away from your own job.
Difficult co-workers can withhold cooperation and support and can undermine your popular authority. Whether or not you're considered a team player is determined largely by the quality of your interaction with others. Difficult lateral relationships can be costly in hidden ways.
If your boss is difficult and you handle the situation clumsily, you could wind up being labeled difficult yourself - a label that you might not shake for the rest of your career.