As said above, they are quite necessary for large amounts of AI, otherwise your system will take a hit. The same kind of rules/reasons as apply to CFS2 really. You may see lower LOD models than you want sometimes, but when on the tail of a bogey, or on finals, the last thing you want is ropey frames and stutters caused by over complicated AI models. Saying that, simple single LOD AI models offer a nice alternative, I've always found Bill Lyons GW3 AI to be fps friendly, even though they are single LOD. They may not look the best up close, but I'm not getting to close and personal to often,and the illusion they create is enough for me.
Jamie