The VTC is just a standard passive tone control, like on any Fender bass. It is basically a treble roll-off control. Depending on the tone you like, it can be handy on the Sadowsky bass, since the treble and bass control are boost only.
If you have a cab without a tweeter, or any sort of tube oriented vintage sounding rig that doesn't extend up into the high treble, it's probably not necessary. However, for more full range modern rigs, the Sadowsky (especially with the standard HC pickups) can be quite bright. The VTC is useful for taking the edge off the sizzly range of treble.
So, if you put a Sadowsky in passive mode (which sounds pretty darn good with the single coil pickup option, not so much IMO with the HC stock pickups), you basically have volume, blend, and the passive tone control. The VTC can also be used in active mode, and you can get some cool variations of treble by mixing the treble active boost with the VTC roll-off.