I haven't seen the need for need for one yet, myself. But I do know that if you have a lot of traffic and the database hits and CPU usage are slowing down your site, a caching plugin could speed it up quite a bit. So can moving to better hosting, but not everyone has that luxury. I know of quite a few on free hosting that use caching plugins to cut down on CPU usage, which can be quite restrictive on free hosts and carry a penalty of having your site deleted if you exceed the limits.