Interesting. That's not just wear, or the adjacent letters would have been affected. Wait for a more qualified answer, but I would tend to suspect a grease-filled die or something like that.
Agreed. You can also see that the N and S were partially filled with grease/debris preventing a full strike
It's possible that it could garner a little extra money, Grease filled dies are common and it would take a couple buyers really wanting it to make it worth your time.
It's just a grease filled die. What would you pay for it? Or is that why you're asking, you don't know they're that common? When they're very dramatic, they get something, but as novelty items. They're just the Mint doing a bad job.
After enlarging the photos you've provided (you should post Full Image when possible) and studying the one @lordmarcovan was kind enough to provide, I'm leaning towards a possible strike through. Paper that could have affected just those letters, but in either case, it does not increase the valve of the coin. 1936 Buffalos can be had in that condition from culled groups of them, so to answer your question, no, not worth much.
