Was the Reformation necessary? You bet it was. Here's a very brief review of some problems in Medieval Catholicism which to some degree still exist in the RCC today:
- The importance of the Sacraments was exalted over the importance of preaching God's word. The seven sacraments (so called) were considered to be the arteries of the body of Christ and the way that the faithful would receive God's grace. The problem is that the sacraments were mechanical. Participants need not understand them, they need only participate in them in order to receive grace. This leads to our next problem.
- The church assumed that parishioners were mostly incapable of understanding the Christian faith. Therefore Christian faith must be mechanical. The Bible was not translated into the common language. Mass was said in Latin. Parishioners understood not a word. And often times clergy did not even understand what they were saying. What mattered was not understanding. The unwashed masses were probably incapable of understanding. What mattered was the rituals themselves. Hence an exalted view of the sacraments.
- Justification was thought to be a process, not a definitive act of God. Justification was seen as God infusing his righteousness into us and slowly making us more righteous whereby we would eventually become totally justified and thus merit salvation. The problem with this is that it leads to the natural question - "have I become righteous enough to merit salvation?" Those who took this most seriously would obsess themselves with a fearful and minute examination of conscience. This later took the form of confession of sins to a priest along with the priest questioning the parishioner to help them examine their conscience and expose all kinds of sin. But in this system there is never any rest or peace because our sin is unfathomable.
So, in short, the Church took the place of God. Only she could dispense God's grace through her acts (sacraments). She robbed God's people of God's word by effectively denying them the Bible (Latin Mass, no common translations). She made the people of God enslaved to clergy in order to gain a faulty assurance of their own salvation.
So was the Reformation needed? You bet it was. Is it still needed? You bet it is. Many of these issues still persist in Catholicism today.