Thank you for all the responses 
That's what my teacher insists, but I can practise 5 minutes and have the same end result as with 30. Also, I find with repetition, I will make a mistake, and end up ingraining that mistake through repetition. So far my pieces haven't deteriorated, even those with scales/arpeggios used extensively. So why practise so religiously? Does it more depend on more advanced pieces? My teacher also insists that it aids with memorization, though she never ended up giving a concise answer. Can anyone show me a reason for that?
I would make a wild guess that having a more reliable technique gives less worries, and thus aids memorization.
Practicing technical exercises can without a doubt be shown to be helpful. However, this is not due to the nature of the exercises themselves, it is due to the
concentration applied by the pianist.
It's often argued that if you only practice repertoire, every time a technical challenge comes up you have to practice it anew (for instance, no matter how much you practice the thirds in La leggierezza, you will have to start from scratch in Chopin's G major nocturne). The reasoning behind this is that the figurations are different.
The incompatibility of that argument with reality is apparent: no exercise reproduces figurations found exactly in pieces either. You can play chromatic scales in thirds up and down in an exercise, but that is not the way La leggierezza is written.
Technique is essentially the tools you use to solve problems (by which I mean: chromatic thirds are not a technique, how you play them is a technique). Anytime you apply concentration when dealing with a physically difficult issue, you discover ways to make it easier: that is technique.
You can practice an exercise of chromatic thirds up and down, and make it easier, and apply that thought process and gained facility when playing Liszt. However, you can also concentrate while practicing Liszt, playing the melodically written chromatic thirds, and thus improve your performance of the mechanical exercise.
This addresses the question: are technical exercises necessary? The answer is obviously no. Do they help? They can help, just like practicing your repertoire can help.
Nothing on piano can be played without technique, so the question "How important is technique?" is redundant.
Walter Ramsey