I went about 4years with my bad downstream O2 sensor. I even did my novice-MPG trials with with the bad O2sensor.
I don't recall the CEL code, but it was the passenger side (ie. right side from driver seat POV) for "High Voltage error" or something along those lines.
I was able to "get away" with it during my bi-annual smog check, since one day it turned off and I rushed my truck in to get it smogged
I finally changed it out upon the 2nd time around for smog for about the same price as you mention ($70 from online store).
From my experience, there was no ill effect to engine performance.