Formal Night is not just about wearing something nice. It generates a good feeling and transforming into a refined and elegant individual. It also offers the family, or couple, a chance to have professional portraits taken for FREE. You only pay for them if you really like them, later in the cruise, and it could be a memory and keepsake of your vacation.
People tend to act more sophisticated and use better manners around everyone. It does add to the bulk in a suitcase but you could always cut back on some outfits or wear mix and match to lighten the load.