Is the HP necessary? No.
Does it help sell cars? Yes.
Who's to blame? I think ultimately the government. If they instituted higher emissions standards and gas mileage for autos and actually regulated what SUVs spit out, this HP war wouldn't be so prominent. At the moment, the government's raising these standards at a snail's pace, totally at the whim of the industry. Therefore, auto makers are able to produce these high output engines. It's a major selling point and the public wants it. People will always want more HP, it's inevitable. Auto makers will always push the limits to maximize what they can. It drives innovation. With gas prices so high with seemingly no end in sight for when it'll ease up, you'd think the government would step in and push forward legislation boosting gas mileage and emissions standards...but nope.
Don't get me wrong, I LOVE HP a the ability to haul ***, I do so daily in my Rex, but am I willing to give some of it up to better the environment and lessen our usage of fossil fuels, damn straight I am!