Well, i'm starting to think the pragmatic approach to every problem is required and not to just subscribe to the purist architectural standards out there. Your app may be required to run in the wild and be maintained by many developers serving a large set of client etc. and this may direct or drive your architecture.
- The ViewModel is essential when you want a separation of concerns between your DomainModel (DataModel) and the rest of your code.
The less dependencies you have between the Model, View and Controller the easier down the line it will be to make changes to the DomainModel without breaking the interface contracts in the View and Controller etc. etc. But once again it's something to be pragmatic. I like the approach as code re-factoring is a big part of system maintenance - refactoring may include a simple spelling mistake on a property of a Model - that change could ripple through the code to the Contract level if the dependencies are not separated; for example.
- The ViewModel is used to translate the data between your DomainModel and you Views
A simple example of a datetime stored in Informix has to be translated to a .Net DateTime. The ViewModel is the perfect place to do this translation and does not force you to put translation code in all sorts of unwanted places.
One attribute of a good design [of anything] is the ability to replace or modify a part of the implementation with little or no affects to the rest of the parts of the system. But this takes effort and time to achieve - it's up to you to find that practical balance between a perfect design and a design that is just enough
But yeah, there are many other good reasons to use certain patterns - but the bottom line is this:
Nothing forces you to use ViewModels... ASP.NET MVC won't force you. Take advice from the pragmatist inside you.