Music theory is the nuts and bolts of everything we do. IMO, it's important to not only know what to play but why you're playing it and why it works. I did 4 semesters of theory, 1 semester of jazz theory, and 2 semesters of jazz composition/arranging in college. I'm sure I'll do more in grad school. I have a very easy time analyzing compostitions, solos, whatever and incorporating what I learn from those into my improvisational vocabulary.
Knowing what I know now, I believe that if I hadn't acquired the foundation that theory provides, I'd just be skimming the surface of a lot of the music. I look back to when I was in high school. Yeah, I could play the notes on the page, but I really had no idea what was going on, even within my own part. Now I know.