Absolute necessity as far as I'm concerned. I wouldn't consider it cheating.
Hell, if you listen to just about anything it's had the crap compressed out of it. With guitar it starts with pedals but going through the sound board as well. Then a final time when the songs are mastered. Then yet again when they're played on the radio.

Of course it depends on what style of music and what level of recording you want to make. If you're doing hard rock or pop then for sure, you'll need it at some point if not all the time.
However, if you're doing something requiring more dynamics meant to be played on a high end system you'll want to keep the processing to a minimum.
Although you'll still need it to some extent when the CD is mastered.

As far as guitar players go, try listening to some of the bootleg Van Halen stuff that was recorded in the studio during the first album or the acappella version of leads like 'Beat It'. They're compressed with tons of reverb and other processing.