My thoughts:
Theory is in no way a necessity for making good music, but it can help you understand what makes something sound the way it does. Knowing theory can help you realise what you hear in your head easier and it can help you figure out whats not right about what you've done.
Knowing the basics can also help you move out of your comfort zone more easily. I don't know shit about jazz, but I know how to construct and resolve inverted 7th chords thanks to the 4-part harmony I took at school, and as 7ths and other chords extensions are one of the flavours of jazz, it resulted in the not totally crap jazz wip in the wip forum.
Basically, it comes in handy, and it helps you to articulate what you want to achieve to other people and it helps them explain stuff that you want to know to you. Long story short, learn it.