Well compression lowers the peaks and lows of your playing allowing you to keep a sound that is relatively the same. If I were to use it I would turn it on very low because I play with meaning. When I hit it hard I want it hard and visa versa. I kinda think of compression as training wheels.
I can see how some people might see it that way. In general you can greatly diminish the need for compression with good technique.
But I can think of at least three ways in which that's not the case:
(1) You want a very aggressive slap tone. You can refine your slap technique so that it is basically the same volume as fingerstyle. But if you want that sound that only comes from thwacking the strings with reckless abandon you'll need compression to even out the volume.
(2) You want the sound of effected compression ala Tony Levin or Stuart Zender or any number of others. Up until recently, this was part of why I used compression. For what I do now I want a cleaner compression, but "effecty" compression is an interesting tone.
(3) You have envelope filters or other pedals that generate big volume spikes. Some pedals (the DOD FX25, Frostwave Funk-A-Duck are memorable offenders) really need to be tamed to be useful in a live environment.
