music theory is very crucial and has a lot of influence on how well you understand your instrument, thereby affecting your overall playability. just by learning basic stuff, you know how and why things work, like chord chemistry, the fretboard system and layout, scales, etc.
there has been a subtle debate about how absorbed one should be in theory, especially for guitarists, because how much theory do you really need to rock out to some, well...rock? its a justifiable stand to take
i believe you should be in the middle. learn some theory, but dont get all Mozart about it. On the other hand, be open and creative, but have some structure and sense about what you play. Its a happy medium. learning some basic theory can go a long way. you will have a stronger understanding of what you are playing, why you are playing that chord in that spot of the song, and why everything works togetherr in harmony.
i think its great to have some basic knowledge. music is your craft, know a little something about what you're doing exactly.
getting too absorbed in theory can be harmful to a guitarist, i will admit that fully. i know a guy who really knows his s**t and is classically trained. he can also save his life on jazz improv and chord comping. like, he's the guy who could just play some unaccompanied jazz diddies on guitar at a wedding. knows every chord in humanity, everywhere on the neck.
anyway, while he has the superior knowledge, he ain't got no soul. his style is too 'technical' (mind you he's one of those 80s shredders at heart). its like listening to a machine play guitar rather than a human. he has liimited creativity also. put it this way, he's great with metal, but the blues are his weakness.
if you disregard theory altogether, you'd better have a good ear and the true gift of music if you're to become a decent player. but seriously, some of the things we all know was spawned from theory. so without it, we'd probably still be playing on a primitive level. in order to understand music and allow it to progress and mature, you should know the foundation it's built on