Not necessary, but recommended.
Let’s say you have 35mm film negative transferred to D5 and you’re finishing your film in HD. Should you make SD downconversions of your dailies? If you have a D5 video tape recorder (VTR) sitting in your office you don’t have to. Of course, it is helpful to have SD tapes so you can make additional dubs without having to use your master tapes.
You can digitize a downconverted video straight from an HD VTR into Final Cut Pro or an Avid. Certain procedure must be followed when using this approach. Failing to do so may compromise timecode tracking and render your offline useless for final offline purposes. The procedures depend on the type of VTR, the NLE you are using and the frame rate of the project you’re creating.