Right. Dissenting opinion time, I think.
Sparring is not necessary for self defence. It can help, in limited ways, but largely is a false approximation that leads to false expectations and false understandings. In short, for self defence, sparring is never part of my regime.
Before I get to the reasons and reasoning behind this comment, some definitions as I'm applying them to my construct here.
Sparring = a training device whereby two practitioners of the same art test their technique against each other with both sides attacking and defending (looking for attacks from their opponents) in a protracted engagement, keeping to defined or undefined restrictions or rules. Trading blows, whether competitive or not. Important note: training methods such as Aikido randori (as opposed to Judo randori) is not considered sparring due to only one defending side and one attacking side.
Self Defence = the application of knowledge, awareness, evasion, de-escalation, and physical fighting methods with the aim of safe escape for yourself and any with you from one or more aggressor without defined parameters, restrictions, or rules other than legalities enforced by the circumstances and political/geographic area you are presently in.
Scenario training = a free training method whereby an attempt is made to have as close an approximation of reality as possible, with one or more aggressors and one or more defenders (sometimes one defender needs to guard, or protect the other). This simulation takes into account all aspects of the aforementioned self defence parameters, including allowing for simple escape, de-escalation, and so on.
Right, reasons.
Basically, sparring is unrealistic. It's a game. It's a fun game, and it's a game with a lot of benefits, but none of them are "this is geared towards self defence". Let's look at them side by side.
Sparring involves two people of similar skill-sets (typically of the same school/organisation/art), where both practitioners approximate skill set is a known quantity (a judoka hardly has to be prepared for a jab/cross combination... or a knife... or the friend of the guy you're fighting with grabbing you from behind while you're arguing with the first guy). A real encounter (self defence) is an unknown quantity. You don't know what the skill sets you're dealing with are, and the chances of them being the same as yours are rather remote. Scenario training takes into account unknown skill sets, changing situations (others getting involved, weapons being pulled halfway through the encounter, surprise attacks, and so on), ensuring you are training against the same.
The downside for sparring there is that it is training you to look for and expect certain attacks (thigh kicks, roundhouses, particular methods of punching, trained actions and responses etc) that simply aren't going to be encountered in a self defence situation.
Sparring is a continuous endeavour, with both practitioners engaging until either the time is called, or indefinitely in many training cases, unable to disengage and escape. A self defence encounter has escape and disengagement as a primary goal, seeking to remove yourself from danger, rather than staying and potentially placing yourself in danger for longer than is necessary. Scenario training again is geared up around this ideal, often with "escape the situation" being the requisite for success, rather than getting a knockdown or knockout.
The downside for sparring there is that the option for escape, common sense though it may be, will not have been trained, and therefore likely will not be utilised should the opportunity present itself, as there is no "template" for that tactic within the fighting toolbox of the practitioner.
Sparring is engaged within obvious or undefined restrictions or rules. It's not ever really "no rules", as there are established methods of attack and defence that are applied by both participants (both using similar kicks, strikes, movements etc), or an established weapon set, or range (grappling, striking, weapon for Kendo or some FMA systems, and so on), as well as assumed rules (no strikes to the groin, no targeting the knees etc). A real self defence encounter doesn't have any of that at all. There aren't really any restrictions on kicking the groin or knees, there is no single established range or set of attacking methods (on either side). Similarly, scenario training is geared towards understanding the common attacking methods, and going against those, rather than a trained, stylized action.
The downside for sparring here is that a false expectation is established, which can lead to a form of blindness to safe, reliable tactics when required.
Sparring deals with two attacking and defending sides simultaneously, which means that at all times both sides are both looking for openings, and looking for the attacks of their opponent. This changes the way they fight, as there is more risked by attacking, due to the fact that the opponent is expecting it (note: when I say there is more risked, that is a comment on the perception of risk, in this case, having your attack defeated and made null and void). Self defence encounters typically have one side attacking (which could be multiple attackers) and one side being attacked. Note I didn't say "defending", as that is not really the case, at least in the way the attackers see it. The person/people being attacked are exactly that, being attacked, and they can then respond in certain ways, which may be defensive in nature, but not necessarily. Scenario training mimics exactly that, with one side being the aggressor, and the other being attacked (in some form). This enables a more realistic analogue of an actual self defence encounter, as well as opening up to any appropriate response.
The downside for sparring here is that, well, it's nothing like a real self defence encounter.
Honestly, there's a lot more that can be said to highlight the differences between sparring and self defence, but the simple detail remains that claiming it's realistic isn't correct, mainly as it's not supposed to be. Sparring is designed for a range of benefits, but realism isn't one of them. It's designed to toughen you mentally and physically, it's designed to give you a way to test reflexes and match yourself up against similar training partners in a safe manner, it's designed to improve cardio and endurance, it helps with timing, targeting, movement, and a lot more, but it's not designed to be, and isn't, a realistic method of training for self defence. Scenario training, on the other hand, is designed to be as realistic as it can be.
Now, with all that said, what is required is a form of free-responce training, realistic responses in your training partners (which, believe it or not, isn't really "resistance", as that, again, is not realistic in many ways), contact, drilling, and pressure testing. But none of that needs to be, or even should be sparring if self defence is the reason you're training.
) for example, if you hit someone in the solar plexus and they throw up, that's legal-- you wouldn't be told you were hitting too hard. My teacher always says that if you don't get hit at all, then you get hit in a SD situation, you will probably be way more scared. we also do self-defense drills (takedowns, throws, wristlocks, arm bars, headlocks, ankle locks, falls, rolls...) on actual people 
