I would have loved to see the Squid in the film and the devastation it causes. Seeing the city streets littered with bloodied corpses would have been far more emotionally powerful than just having New York explode and become a crater. However, I had come to terms with the fact that the Squid would be removed, so when it came to watching the movie it did not shock or upset me.
The replacement plot about Jonergy bombs was not that bad either, and worked within the film, so overall I accepted the change, despite prefering the Squid. However keeping the Squid might have helped drive home to the audience the intentional ridiculousness of Watchmen.
I do agree that some of the other changes, such as changing "Nothing Ever Ends" were far more disappointing. It's one of them most iconic lines in the novel, and a very powerful moment, yet in the film it's given to another character and said as the film is wrapping up, with no reaction from the person who it should be affecting the most (Adrian). Other changes, such as the removal or change of every icnoic moment from Adrian, were far worse than the removal of the Squid in my opinion. Adrian is my favourite character. I had no problem with Matthew Goode's casting or performance. I had no problem with the Ozymandias costume. But I was disappointed with Adrian in the movie because of the removal of all of his best moments in the novel ("I DID IT!" probably being the most painful removal, along with "I did it 35 minutes ago" being changed).
To answer the original question of whether or not removing the Squid was necessary, I doubt it would have changed the box office response too much. But I think including the Squid would have made a better movie.