The grass also serves to hide a good deal of ugly low-res landscape textures, too. (though turning it off will help with finding various things like dead bodies, for instance.)
If you want to address performance problems with the stuff, use http://www.tesnexus.com/downloads/file.php?id=5434 This little mesh replacer is a seriously big help.
And there's also the grass bleed that is absolutely loathed by modders when it has grass growing everywhere it shouldn't be....
You know what? I say this one is a personal taste call. I like the grass on, myself, but I can see why some would prefer it gone.