Compressor misconceptions, interesting thread title but bass compression is a widely misunderstood subject. Unfortunately, a lot of these misunderstandings and misconceptions have appeared on Basschat over the years which only serve to further confuse an already widely misunderstood subject. And unfortunately, a lot of this nonsense is still available when searching the forum and through Google so is likely to perpetuate.
My take on it is that some people assume a stomp box compressor is an effect, they expect something spectacular to happen when they engage it, or for something immediately obvious as you'd get from other effect types, filters, synths etc. When this doesn't happen the questions start which is fair enough or assumptions are made that the pedal serves no purpose. This is where, IMO the misconceptions start creeping in. Regardless, while not exactly glamorous compression is a very useful tool in much the same way that EQ is a useful tool. While it can be used as an effect that's not really its point.
Possibly the most sagely advice I've seen on BC regarding compression was something along the lines of "don't think like a bass player when using it, think like a sound engineer". That's when it all makes sense.
Do you need one? No, not really, but if it's going to help you sit better with the other instruments, why wouldn't you?
Can you control your dynamics with your fingers? Yes. To a point. But depending on where you play the same note on the neck (e.g. G at 15th fret on the E string compared to an open G string) the same note can have hugely different dynamic energy levels. While you can play one louder or harder than the other a compressor will smooth these out so both notes will work in the mix despite their different harmonic densities.
Compression kills my dynamics. Yes it can if you haven't set it up correctly. In the same way that a poorly EQ'd tone can make you sound awful. But when done right you retain your dynamics and still sit better in the mix.
While compression takes a while to understand it's worth doing your homework to get a good understanding of how to get the best out of it. Many of us spend a good chunk of cash on gear chasing the sounds in our heads, we buy certain basses and amps to make us sound great, so why not use compression to help make you slot in alongside the other instruments you're playing with?