Is a DAC still needed?

Yes and No.

It depends upon what you want from your source. Not all CD players will have the ability to stream music from a computer or play the same types of discs. Some are more universal than others. The type of chip-set will vary as will jitter control, noise floor, reputation, etc.

You should map out what you want from a player and the types of files you will likely listen to and the the connections needed to accomplish that. (CD, CD-R, SACD, HDCD, Flac, WAV, Internet Radio, iTunes, USB media, Ethernet etc.) upsampling, No-Oversampling, Hi ReZ.

There is a lot to consider isn't there?

It depends on what CD player you have.

If your internal DAC is better than the outboard, no. It probably doesn't matter how expensive your player is, someone may find a more expensive outboard DAC for it. But better sounding? Like Rrog said, it depends on your player. Then like Tom6897 said, there are other sources that could use one.

I would suggest that its only a matter of time before the dac becomes the audio source and the cd player is a historical oddity like 8 tracks. not sure I see much logic in spending lots of money on a CD player. Course thats just me but I bet that as time goes by more and more folks fall into this group.

Definitely a DAC makes sense, now more than ever, for the computer/music server based systems.
Spinning silver discs will continue to happen, but will dwindle to a trickle.
Music servers, like the one W4S is currently offering, rips CDs upon insertion, thus one could transfer a CD collection onto the server seamlessly, on "as listening" basis.
Disc transports will slip into oblivion. I'm with Paulsax on this one...