It depends on what kind of a show you want. Do you want a fast-paced, high impact show? Then you probably wouldn't want a "ballad," so to speak. But shows that compete to win need to show that they can do it all. Sure, show the trumpets that can pull the high C, clearly, and show the clarinets and flutes that can run the breaks like it's nobody's business. But you'd also want to show that you can produce the most beautiful, powerfully moving sounds ever put on turf. Show that you can create chords so wonderful people are crying by the time you're done. Use the ballad to show that it's not all about the technical stuff, not all about the range or volume.
Think also about the visual aspect. Remember Reagan 03? The ballad was great (Linconshire), but what really hit me was their guard: massive flags (probably around 15' by 30'). I doubt they could've pulled those massive flags out at any tempo faster than a ballad. Ballads give the guard an excellent chance to do something creative, unique, and what normally wouldn't be possible at faster tempos. "But the band can't move much at slow tempos!" Why's that bad? If you're band just marched a 200 bpm, 2-minute long movement, they might like a slower pace. It gives them a chance to rest their lips for a bit, to catch their breath, and to recover for the next movement (which is, of course, 3 mintues long and goes 220).
So, no, ballads aren't mandatory, but they sure do help out. IMHO.