A typical bandsaw blade will have a tooth set to the left, one right, and one straight. So if you look down your bandsaw blade you will notice this all the way around the blade.
The left and right set teeth have around .018"-.025" of 'set' in them. The object is to have enough set to clear the body of the blade so that the straight tooth has a clear path through the log.
If there was no set put into the bandsaw blade teeth the log would bind down on the blade and evidence of this is often seen when the wood starts smoking from the excess friction.
As the teeth wear on the side it looses tooth mass and the result is the illusion that the tooth has lost set when it fact the friction has simply worn the tooth down. That is why proper sharpening and re-setting are necessary to reshape the tooth and then re-set the reshaped tooth.