Modern coins are struck inside a movable collar, which aligns the coin with the dies, insures consistent shape and diameter, and in this case, imparts reeding to the edge of the coin. Had your coin been somehow struck without the collar in position, an error known as a broadstrike, it would likely be slightly larger than normal, possibly a bit off-center, and would not have any trace of reeding. Yours was struck normally, then had most of the reeding removed. It is damaged.
As for worth, it is only worth 25 cents when used over the counter. It probably would be rejected by a vending machine.
Looks pretty cool, though.