No you don't need to have it on the server, for the reason you mention. You can exclude the DWT from publishing if you choose, with no harm. I tend to publish it anyway, partly because it is just the easy path, and partly because that way I have an extra backup of the DWT just in case something goes horribly wrong. The size of the file is minimal, so that shouldn't be an issue. It's up to you how you want to do things.
Jim