For each more significant bit, the resistor needs to be proportionally more accurate. A DAC application could be more tolerant in reading jumps in the LSB, however for the OPs application, this would cause false readings of which button(s) were pressed. Many combinations could never be read correctly.
"Consider an 8-bit ladder specified so that there is solely a ±1.0% absolute tolerance on the resistors. The full resolution of the ladder may not be realized. Ratios within the network could be as poor as almost ±2.0% yielding a ladder, which, although manufactured with 8 bits, may only provide accurate outputs to the 6th or 7th bit." - app note, pg5