No, it's not needed.
You should only clear your cache when you have issues, you will have to re-download ALL updates for ALL of your games if you clear the cache.
Not all updates are stored in the system cache, only the small ones like what Bethesda has been releasing lately. Some games have large title updates that are stored in the HDD, like some of the updates for New Vegas or the most recent 2gig update for Battlefield 3. I did have to re-download a patch for Oblivion since messing with my cache, but this doesn't cause problems as these small updates only take a second or two to download.
That being said, I was wondering what the difference was between clearing the System Cache and clearing the Game Cache?...I remember with Oblivion you could hold "a" as the game started to clear the game cache, and this would help with Oblivion lagging and freezing up.