Are they necessary? Or are they a relic of a bygone era, a time when an author could ramble on without worrying about boring the reader because movies and television hadn't been invented yet and everyone was starved for entertainment?
Personally, I think they get in the way of my writing. I prefer to write in scenes with asterisk breaks. Of course, one might say that I'm essentially using chapters, I'm just not calling them chapters. But I don't think so. An asterisk break feels different from a chapter break. *shrug*
I think there's definitely a disadvantage to using chapter breaks, and that's the fact that they are convenient stopping points for the reader. With an asterisk break, the reader is just a little more likely to keep reading. Always try to write a page-turner.
Wherever the truth lies, I think I'll try going writing without chapters for a while. At least until someone complains. ;)