I don't think it's needed everywhere like most devs want to believe. Personally, I can do without it, but it's also not the end of the world if games have it. It doesn't matter to me whether or not a game offers customization. I just think of it as a fun little bonus. But I do prefer games with established main characters to play as, like Mario and Link, May and Dawn and Lyra, Ness and his friends, Captain Olimar, and so on. The only sim I like to have character customization in is, naturally, farming sims. Usually I name my farmer after one of my OCs and make them look like them, too. Stardew Valley is great for this because of the copious amounts of customization options.
The thing I always remember about customization is the radical shift from Pokémon X/Y which let people customize their player in lots of interesting ways to ORAS where suddenly, inexplicably that wasn't an option anymore. It really upset some, but not me personally. I enjoyed ORAS even more without the ability to customize, since I prefer playing as established characters with their own names, design and personality. They're great and iconic just the way they are.
A game I feel didn't need character customization at all was Pikmin 4. We went from playing as Captains with a backstory and established lives and names and personalities, to just a generic player (not even a Captain) with no voice, no opinion about anything, no cute quirks. At one point throughout the game, Oatchi felt more like the main character than me. Oatchi had tons of personality and cute moments.
If I do customize, I don't try to make the player resemble me too much, mostly I just give them my skin color if that option is available. Other than that, I give them some interesting thing that differentiates them from me, such as giving them glasses to wear, red or yellow eyes, white/green hair, a bit of makeup if it looks good lol