They're not required, but it's highly recommended.
In short: undeniable proof they are US citizens. There are some instances when US passport alone is not enough to prove US citizenship. Many years later, could be when parents no longer around, children may be asked to reprove how they became US citizens... It would be very easy with certificate and not so easy without it.
Here are reasons to get certificate:
Here's somebody in trouble because they didn't have certificate: