They are not needed, the biggest reason you see so many is because some states require them.
What that means is a manufacturer either makes special models that can only be sold in certain states, or they add what is often a very simple modification to open up their sales to all states.
Some designs do slightly reduce reliability by adding an extra mechanical object that can cause problems, without really adding anything worthwhile.
Many of them fail to accurately display, or as they get dirty cannot move and give inaccurate info. Someone used to it saying it is loaded half the time when it is not is going to just ignore it anyways. Likewise any third party relying on them if checking or clearing someone else's weapon (like say police) is also being foolish.
While those with cuts or slits that actually let you see any brass have just created a new weak direction for pressure to vent and added greater chance of a kaboom with weakened or poor condition brass.
If relying on the indicator is foolish, and being able to see brass makes the firearm less safe, you are not even gaining the benefits to offset the slightly reduced reliability.
Many apply pressure to the casing or have the potential to get dirty enough to cause trouble with extraction. Adding a little more friction to the round than would otherwise be present during cycling. More friction also increases wear.
The most noticable cycling issues are likely to be with the smaller rounds, as they have less energy cycling the firearm to overcome political additions that increase friction.
I have seen some very reliably .22LR designs that become a little less reliable with a LCI for example. They may be just fine when clean, but add a little more friction from carbon and other things they could normally still cycle through without a LCI and the LCI can tip the scales and cause a failure. It is obvious when you remove the LCI from a firearm and it becomes a much stronger cycling firearm with rare hiccups even when dirty.
