Many guitar players can go a long way and be effective players without knowing much explicit guitar theory. That's pretty much an obvious fact.
By "explicit" guitar theory I mean having a formal understanding of how scales work, how chords are related, what keys are, etc., etc.
By the same token it is also obvious that a guitar player must know what a note is, must be able to play chords in sequences and progressions, will intuitively know how a scale works, and which bass notes work with what melodies.
Asking whether you need an understanding of music theory to be able to play effectively, is similar to asking whether you need to know English grammar to be able to speak intelligibly and "correctly".
This question has a dual answer. "No" you don't have to be able to explicitly say what the rules are. But also "Yes" you need a grasp of how language is used in practice, and therefore need an implicit understanding of how the rules work. - at least the major ones.
As far as I can tell the same thing goes for music theory. Like a grammarian you can get hung up on the rules and spend more time and energy analyzing the way we speak rather than just putting the rules into practice.
The beginning guitar player can spend more time learning how chords are constructed, and why progressions work the way they do, than she does actually playing them.
I suspect this is what most criticisms of formal music lessons boil down to: "Too much attention to theory and not enough attention to actually playing."
Practicing Scales is Not All About Theory
I think the same criticism is also levelled at teachers who emphasize exercises and scales for new students.
The simple fact is new players are encouraged to do repetitive exercises and scales for two fairly distinct purposes.
On the one hand we play the C Scale over and over in order to learn where the notes are and how they go together. That much is what we might call "theory".
But on the other hand we play repetitive exercises to train our hands (and minds) to make the general kinds of moves we need to play the instrument smoothly and relatively effortlessly. This is not theory. It is like a baseball pitcher learning to throw strikes, a soccer player learning to hit the top corner of the net, or a golfer hitting thousands of shots on the driving range.
It's just that a musician playing scales is doing both things at the same time: learning a bit about theory, while gaining dexterity, strength and quickness.
So Far, So Good. But What About More Explicit Theory?
The most obvious example of "more explicit theory" is learning how to read traditional notation. But there others such as learning about minor chords, different modes, odd and unusual rhythms, standard chord shapes, playing chords further up the neck, and having access to relatively unusual chords such as diminished, augmented, and on and on.
Most of us can get by without a formal understanding of most of these things as long as we stay in our own little comfort zone or stick to playing with our regular band mates.
But as soon as you step outside of that comfort zone to play with other musicians - especially if they know more than you do, or approach things a bit differently - that's when you find out how much you don't know.
So it's difficult to see how it would be bad to learn some of these things. Probably the best way to find out which things you should focus on is to ask other musicians you respect.
One place to start might be an online forum moderated by people or instructors who share your specific interests. For example, if you're into blues it would be hard to beat the advice you can get from Griff Hamlin.
The Guitar Professor has his own website where he provides practice tracks for aspiring musicians.