There is no explicit requirement to use MSI installations however the msi engine is an integral part of the operating system and I think it makes sense to use it if it is there.
I can say that I personally would not use old Installshield for any new installation project.. However there is a learning curve with msi and if you have an urgent need you might be better off using your old tools until you have time to exploit the power of msi.
Msi offers a range of upgrade options.(Msi has a varied range of overwriting and removing rules that can be put together to make flexible upgrade, repair and reinstallation options).
Msi offers working file sharing facilities. (If a component is shared between more than one product msi keeps track if a component can be removed or not).
Msi offers ways of effecting easy roll out.. (Silent Installation, Admin Installation).,
Msi offers support of multiple user machines. (Msi can be arranged to sort out per-user settings when the next user logs in.)
Msi offers auto repair. (If a user have accidentally deleted a program msi will automatically reinstall the broken component)..
Msi offers install on demand. Only icons are installed then if a user tries to run the icon the installer pops up and installs the required features).
Msi offers elevated installation. (So a less powerful user can access normally restricted parts of the machine).
Msi has a very limited default user interface. (Advanced users and to a lesser extent Installshield users can do what they like with the user interface. Some recent Microsoft products use html user interfaces).
The most recent Installshield product allow a relatively gentle migration to the world of msi. It encourages a few design errors but it is useful for experienced InstallShield programmers.
I am sure other people can give you further views.