Vocal complaints about self-insertion in Sailor Moon fics amuse me, since Sailor Moon itself is an example of blatant self-insertion. Takeuchi makes no secret of the fact that Usagi is based on herself, and a lot of the events of the series, particularly during R, just amount to a Mary Sue-esque power trip. "Tee hee! I'm a princess! And in the future, I'm queen of the world! Tee hee!" Hell, most of Sailor Moon R plays out like a fanfic. When Takeuchi uses cliches and gimmicks, nobody minds, but people criticise fanfic writers as a whole because many of them use similar devices. It's a strange situation indeed when amateur authors, writing for free, are held to higher standards than professionals.
Fanfic isn't "necessary", but it's one of the ways in which a fandom can be kept fresh and vibrant. Of course, picking your way through the crap to find something worthwhile might be time consuming, but nobody's forcing anyone to opt into it.
Also, I'd like to pick up on the drawing/tracing analogy, on the basis that it's a particularly crappy analogy. To liken fanfiction to tracing implies that it requires no original thought or creativity whatsoever. Perhaps you consider fanfiction to be inferior to original fiction, and perhaps you're right to do so, but you have to concede that it requires some original input. And I would argue, from my own experience, that writing fanfiction is a way of sharpening up writing skills. I wrote an extremely long, multi-part fanfic (based on a certain mid-90s anime that I somehow keep mentioning) over the period of a year and a half. By the time I got to the end, I was looking back at the early chapters and thinking about how differently I'd write them now, given the benefit of my experience. Nowadays, I've moved onto original works, but what I learned from my fanfic career was decisive in motivating me to continue writing. Fanfic is great for people who want to try their hand at creative writing, because there's already an audience for your material, and you can get very rapid feedback (admittedly this seems to work better for smaller series where the constructive-feedback-to-noise ratio is a little more favourable). If, on the other hand, you embark upon writing a novel from scratch, it's a lot of work with no encouragement that may well never see the light of day. Of course fanfic isn't the only way of building up your confidence - I'm not suggesting that Shakespeare wrote Chaucer fanfics - but if you enjoy a series, then it's a fun way, and a way of giving something back to the fan community as well.