True, but if they want to have DLC content, they do need one because as far as I know it requires you to save the game to the consoles HDD so that the DLC can be applied. Besides, games run so much more smoothly on the 360 if you save it to your HDD.
This. And, if you install a game into your 360 hard drive, the disc itself won't have to spin, therefore, your 360 won't overheat. (Too quickly, that is.)