The way I see it labels have a place but they can also be an issue to some bands.
As others have said smaller labels are helped massively by larger labels distributing their product. Then there are bands who create their own labels and license to larger labels to keep more money and control over their product. However on the flip side there is bands like Flotsam and Jetsam who, while constantly praising their label, never seem to get the same benefits as other bands.
Although the world was different in the 80's and 90's labels were a big part of what we could and couldn't get in Australia, many major labels had local distro which meant many bigger 'signed' bands got released here and had their albums sell for $25-30 per CD. Whereas bands from the same areas, playing the same overseas gigs, who didn't have the bigger label support, meaning their CDs were import only, cost anything from $30-60. The same thing still happens here a bit but as the years went on many of the labels even set up local offices here and where local distro didn't happen the internet allowed us to get albums ourselves rather than rely on the music shop who still wanted up to triple the price to get something from a minor label.
Not all bands want labels and good luck to them, but they still serve a purpose and those lucky enough to get one will probably see more success. However not every band out there is looking for world stardom and riches beyond belief so the answer to the question of does metal need labels is probably best summed up in my mind with, 'yes, but not by all."