HTTP ETag caching is a mechanism to validate http web cache, when server detects the tag it responds with a tiny 304 Not Modified response instead of the regular 200. in this video will explain how E-Tags work, their pros and cons and attempt to answer the question are E-Tags bad?
Video Links
High Performance WebSites
https://web.archive.org/web/20101003235416/http://developer.yahoo.com/blogs/ydn/posts/2007/07/high_performanc_11
Reduce network bandwidth with ETag
https://www.infoq.com/articles/etags
Tracking without cookies using E-Tags
http://www.arctic.org/~dean/tracking-without-cookies.html
Enjoy the video!
Hussein Nasser