Quantitative biology relies on the construction of accurate mathematical models, yet the effectiveness of these models is often predicated on making simplifying approximations that allow for direct comparisons with available experimental data. The Michaelis-Menten (MM) approximation is widely used in both deterministic and discrete stochastic models of intracellular reaction networks, owing to the ubiquity of enzymatic activity in cellular processes and the clear biochemical interpretation of its parameters. However, it is not well understood how the approximation applies to the discrete stochastic case or how it extends to spatially inhomogeneous systems. We study the behaviour of the discrete stochastic MM approximation as a function of system size and show that significant errors can occur for small volumes, in comparison with a corresponding mass-action system. We then explore some consequences of these results for quantitative modelling. One consequence is that fluctuation-induced sensitivity, or stochastic focusing, can become highly exaggerated in models that make use of MM kinetics even if the approximations are excellent in a deterministic model. Another consequence is that spatial stochastic simulations based on the reaction-diffusion master equation can become highly inaccurate if the model contains MM terms.