They're not necessary to the game. With the exception of missions where you must use bombs (because the game makes you) and the Piri Eris missions, I believe it is possible to beat the entire game without dropping a single bomb.
Whilst smoke bombs were part of your arsenal of weapons in both ACII and AC: brotherhood, revelations really built on the bomb concept.
There are three basic categories which the bombs fall into- diversionary, tactical and lethal. And in each category, there are a variety of possibilities. From memory there are, in total, eleven different effects.
For instance, there is an option of placing shrapnel inside a lethal bomb which obviously sends shrapnel tearing through the bodies of anyone unlucky enough to be within the range.
You can also use different casings for different effects. For instance, sticky pouches can thrown at a guard and will explode five seconds later. I can put anything inside the bomb- I can send shrapnel flying through their bodies, or envelope them in a dense cloud of smoke.
I like using these on patrolling guards, as the bomb gives me a valuable five second to run away before its effects take place. No matter where the guard/s go, they cannot escape the inevitable.
You can also use three different types of gunpowder- Indian, Arabic and British. Their range is small to big, respectively.
For diversionary bombs- such as cherry bombs which loudly ignite sulphur, I use British gunpowder to give me the loudest noise, ensuring more guards will leave post to investigate the noise.
For lethal bombs, I prefer using Indian or Arabic gunpowder. I do not want any civilian bystanders to also be killed. For instance, the datura bomb release a toxic fume, and the larger the fume, the higher the chance of a civilian passer-by inhaling the fume. And that is not how the assassin do.
Taking all this into account, there are one hundred and twenty types odd bombs I can make.
As I stated earlier in this post, they are not a necessary part of the game, and can make up a very small amount of your game play. It all really depends on your combat style.
I'll be honest, I did use them in melee combat, but not very often, as I managed to earn one of the best weapon (mercenary broadsword) early in the game. I also have a more general stealth approach- I avoid conflict. Getting into large fights where I kill multiple guards is not stealthy.
However, I still enjoyed using bombs on the occasions that I did. They gave me many different approaches to my objective. Due to the sheer amount of possibilities in the bombs I could craft (one hundred and twenty,) bombs could be used almost everywhere with different purposes.
Considering there wasn't much of an innovation in primary game play in Brotherhood(with the exception of the assassin recruits) the all out expansion on the bombs, and the different amount of ways you could use them was a breath of fresh air.