That’s a big question for writers today. There is no real answer, only opinions. So here’s mine.
No, it’s not and yes, it is. It depends. If you’re writing fiction that doesn’t center around a relationship that normally includes sex, then sex isn’t necessary. However, if you’re writing a story about two people who have a sexual relationship, whether healthy or abusive or whatever, and you don’t write sex scenes, you’re not being honest and your readers will know it.
It’s really about how you demonstrate the sex. I’ve seen it so well done that only the biggest prude in the world would blush. An example would be Dying to Know by Christina Carson. Her sex scenes are not explicit, but you know and understand the kind of sex her two characters experience. That’s what’s important. We don’t have to be included in the most intimate details of that experience, but we must acknowledge that they are having sex and what its nature is to understand more about them as people.
Why? Because people have sex. It’s part of everyday life. If the characters are in a relationship that would normally be sexual and they aren’t having sex, then we need to know why not.
Of course, there are entire genres that don’t require and/or shouldn’t include sex. This is understood. It’s when a writer has story that should have sex in it and it becomes an uncomfortable task that the issue arises. There is always the question in the author’s mind "Will people (my mother, my friends, my children) think less of me if I write this sex scene as I know it should go?" In my opinion, you owe it to your readers to get beyond this. You absolutely must be true to the characters. Most of the people you’re worried about will surprise you anyway.
So, that’s my take on it. What’s yours?