Not necesary, but it is often useful. If you don't see yourself upgrading in the future, then you don't need the update service.
The SUS basically means you pay for your update licenses over time, instead of all at once. If you have v5.5 now, and want to upgrade to v5.6 whenever it comes out, you can either pay for the SUS every year until then, or you can pay the upgrade price then.
The SUS renewal costs less than the upgrade license, but there also aren't updates every year. If you're going the Portal route, it may make more sense. Portal seems to get new versions (V11->12->13->14) every year or so. If your manager (or whomever sets your budget) gets you software when you need it, you might not need the update service. If they are super stingy with money, you might be able to convince them to budget for the update service, and then it will always be taken care of after that.
I think they theoretically notify you/send you versions of other (no charge) service packs/updates, but I just download those when the time comes. Before the downloads were possible, I'm sure this was a much more important benefit.