For some species, it is part of their diet or to aid in their digestion. In addition to looking nice, it also provides structure for the fish to have a more secure feeling leading to less stress.
actually, most sucker fishes need the cellulose in the wood for proper digestion. it can also aid in making the water more acidic without really doing anything harsh to your aquarium. acidic water is important for some species of fish. it primarily depends on what kind of fish you will be keeping as to the importance of the wood to you. ive notice that almost all my fish go up to the wood and at least nibble at the micro stuff living on it.
I think the best answer to the original question is that it is only needed for certain fish but most of us like it in the tank, myself included. I have no plecs but just like the way it looks with plants tied to it or even just for its own structure.