Is it necessary to convert from steam to hydronic to achieve a desired result in your heating system? It depends on what result is desired. That depends on the goal really.
Typical Goals:
1. Save on fuel bills
2. More comfort and control
3. Quieter system
4. More modern system (nicer boiler, modern radiators, smaller risers)
While all these goals would be reached by converting to hydronic most of them can also be reached by upgrading to a proper steam system. All other than goal #4 which is a great reason to upgrade to hydronic and usually happens during a gut renovation anyway.
To convert a steam system from oil to gas with a proper installation of the properly sized steam boiler, header, master vents, TRVs, and thermostat would run a potential client in the area of $20-30k. While convert the entire system to hydronic would only start at $60k. This is without taking into account the construction expenses of cutting and fixing the holes in the floors as well as removing the steam pipes. While a properly designed high efficiency hydronic system does provide more savings than a properly designed steam system the difference is minimal compared to the investment necessary. This is of course unless there is already a gut renovation happening. In that case it's a great time to upgrade.
Another goal that was not mentioned is zoning. It is common knowledge that the ability to zone will provide exponential savings because there is less of a load on the boiler and it's not working when it doesn't need to work. This was true for standard efficiency systems but is detrimental to the efficiency of a high efficiency system. Therefore it wasn't listed as one of the typical goals. But it should be mentioned.
Shortly I will provide case studies on our steam systems and hydronic systems.