I've played in orchestras of different sizes and the necessity question is slightly tricky to answer simply. You can play in quite large ensembles with no need of a conductor, and if, say, it's a piano concerto, the soloist can lead the orchestra pretty effectively. Where conductors start to become necessary is when you've got a big orchestra or when there are many changes in tempo - fairly commonplace in romantic music. You don't have to keep the conductor in the centre of your view - musicians see them flapping and flouncing away out of the corner of their eye.
There's a bit when it becomes a bit circular. Audiences often need a focal point. And, in turn, the conductors who fulfill this role, feel the need to impose their interpretation of the piece. Much of this - their preferred tempos, volumes, degrees of ''espressivo,''etc - will have been communicated in rehearsal and the conductor is there to remind the orchestra how he or she wants it to go.
Of course, if the conductor is an arrogant, pretentious idiot and doesn't command general respect, the orchestra will ignore them. At this point, the conductor has to adjust their baton waving to the speed of the orchestra because otherwise they will start to look completely ridiculous.
