I play with a mod that removes the markers and my game is just fine.
OT: I think they should make it toggleable. If there were two things in vanilla OB that really irked me, it was levelled enemies and the dang blasted quest marker.
Bull. I tried, the mods don't work. If you remove the compass/arrow system entirely, you cannot complete quests. NPCs will say "Go to x dungeon". And that's it. Normally they mark it on your map and you follow your magical all seeing compass. But with it modded off... well now you can't do the quest. It's somewhere north of the city. Great. I have no idea where, because the game doesn't give you any directions outside of marking your map, and with the mod turning that off... out of luck. There needs to be an in between. Sadly, because now we're stuck with voice acting, we can't just add in text directions from various NPCs.