The obvious answer is that in some way, shape or form, games need them — at least internally. If our maps consist of two-dimensional arrays, then we have coordinates. If we employ a physics engine, then we're using coordinates. But, do players need them?
When I'm perusing a game's documentation, and it has a list of coordinates associated with what you'll find there, my first thought tends to be, "How am I supposed to remember that?" As someone who has always struggled with numbers, I experience a pang of frustration upon seeing such. Then I start to ruminate, and I can't help but ask why.
Are we not blind? Do we not live in a world that is maladapted for us? Yet still, we make our way in it. We use mobility aids such as white canes and guide dogs, and we couple those with our honed senses. Add a layer of technology, and we're able to go out and about, doing the things we need to do.
Now, maybe I missed the memo, but I don't recall life ever handing me a keyboard with a, 'c', kay on it that'll tell me exactly where I am in the world. If it did, I think I might try to get into the debug console and make some changes to the universe. So why do we need this feature in games?
I think we have the technology to do better. The only thing we lack is the motivation. Imagine a world that you — the reader — have created. When you walk down streets, there are auditory landmarks that let you know where you are. No, I don't mean simple beeps and boops. I'm referring to sounds that are dynamic; updating with the time of day.
If you pass by an industrial park at night, you're not going to hear the same sounds as if you passed by the same area in the day. But maybe there's a neighborhood where someone has a coy pond that attracts frogs which sing their songs at night.
Instead of pulling an ambience out of a sound library, you build it piece by piece, downmixing the sounds to mono so the engine can properly render the audio in 3D. You position objects that are meant to be stationary, and you define meshes that tell mobile objects where they can go. Thus, you have created an immersive world that doesn't rely on coordinates to tell the player where they are.
As always, my motivation with posts like this isn't to tell people what to do. I'm also not saying that coordinates should never be used. I'm simply suggesting that developers think it over and ask themselves if exposing coordinates to the player is really necessary.