I'm with the others. It's not a disaster if you can't read, but it's better if you can.
There are several good arguments for learning to read: first, it gives you a common language with musicians who play other instruments - tab is guitar specific, so if all you can read/write is tab, it's difficult to tell the sax player what you want.
Second, it gives you a foundation for building other music skills, like theory, harmony, and arranging. You might be able to learn some practical music theory without reading, but you won't be able to dig into it very deeply. And that means that your skills in areas which require an understanding of theory, like arranging, is going to be pretty limited.
Third, learning to read standard notation actually speeds up your learning process. We can only learn from what we've been exposed to musically... so if you learn by ear, it'll take you at least one listen before you can play it (if you're REALLY good at learning by ear); learning from tab also requires at least one listen (since most tab has no rhythm information). But if you can read standard notation fluently, you can play a new piece right away. You'll at least double the amount of music you can be exposed to in the same amount of time.
Fourth, learning to read standard notation helps understand the fretboard. Tab is laid out in one fingering. Standard notation is laid out as a representation of SOUND, and has nothing to do with fingering. For most melodies, there are several ways to play it on the guitar - for many melodies there are LOTS of ways. Tab gives you just one option. Reading well gives you all the possibilities to choose from.
The main advantage of tab is that you can learn to read it in about five minutes. Standard notation takes a couple of years of daily work to read well (that is, in more than one position, and in the most common key signatures). If you want to read chords in standard notation, add at least a couple more years.
I know plenty of musicians who can't read. And I know some who can, but rarely do. Not one who can read has ever told me that learning turned out to be a waste of their time.
One more thing - "reading" (understanding what the little dots mean) is a pretty basic skill, and not that hard to do. It only takes time. "Sight reading" (being able to pick up a piece of unknown music and play it right away) is an advanced skill that takes a lot of time and effort. Unless you're doing fairly narrow musical work - symphonic stuff, musical theatre, radio jingles, etc., most guitarists won't ever need to sight read.
On the other hand, those narrow niches pay really well compared to the gigs you can get without sight reading