Q:

What are the impacts of allowing a Warcaster to cast spells with material components while wielding a shield and spear?

The general consensus on this site is that the Warcaster feat does not grant the ability to cast spells with material components when wielding two pieces of equipment because the caster needs a free hand to interact with their arcane focus or pouch.
Assuming the spellcaster is using an arcane focus, would there be significant balance ramifications to lifting this limitation?
This would essentially amount to saying that the Warcaster feat grants the spellcaster the dexterity to interact with their arcane focus when wielding two pieces of equipment.
In my experience, I've found that material components are functionally equivalent to somatic components in every case except those where GP-equivalent components are consumed. So right now I can't see any immediate negative effects of lifting this limitation. Am I missing anything?

For additional context, the spellcaster in question is a Warlock in my campaign that's using a combination of the Warcaster and Polearm Master feats while wielding a shield and spear.
Additionally, my group tends to be very flexible and lax with components, typically treating them as little more than "flavored" somatic components, except in the case where the components are consumed.

A:

The solution to your problem is Ruby of the Warmage.
This is a Common magical item (from Xanathar's Guide to Everything).  When it is inserted into a weapon (the spear) and the attunement is completed, the weapon acts as a spell focus.  
That way, you don't have to mess with any of the rules or feats or spell casting features. 

For additional context, the spellcaster in question is a Warlock in my
  campaign that's using a combination of the Warcaster and Polearm
  Master feats while wielding a shield and spear.

Clerics and Paladins don't have this problem, since they can use their shield as a holy symbol, but your Warlock is not able to do that.  A few other points:  

The Warlock takes the Improved Pact weapon invocation which allows the use of a weapon as a spell casting focus.     
If there are Artificers in your campaign - Artificers can have a common magical item (including the ruby or the war mage) as one of their infusions from the Artificer class feature Replicate Magic Item. They can give it to other party members.     

Given the mechanical solution ...
... it would not be game breaking to "just do it" at your table.  

Experience.  I have only been at two tables where material component requirements have been strictly enforced, and two where they were now and again raised by the DM, though mostly those had to do with the costly / consumed material components.  At a couple of tables they were virtually ignored and we didn't miss them. It didn't seem to have much, if any, impact on play other than avoiding the occasional "what hand is your focus in?" question from a DM.  At a stricter table, being unable to use a weapon or a shield may have a greater impact on play during combat.    

A couple of ways ahead:  

You may choose to reduce attunement slots by one if you want to roughly reflect the "penalty" that the Ruby of the War Mage attunement slot costs.     
However, as your table seems to be quite flexible
The attunement slot "penalty" doesn't seem to fit your table's
style, so I'd recommend against it.

Additionally, my group tends to be very flexible and lax with components, typically treating them as little more than "flavored" somatic components, except in the case where the components are consumed.  

