How else are you going to get raw data from your camera to a pixel editor like photoshop? You can convert to an 8bit JPEG and then try to edit that, but that simply begs the question "Why shoot raw in the first place?" You can export a DNG, but that will require conversion into a working file format at some point.
You don't have to KEEP the TIFF around, that is why I stated it is a WORKING file format. In fact, if you use ACR within Photoshop to do you raw conversion, you can bring the converted data into Photoshop and save it to a 16 bit PSD. However, until JPEGs become 16 bit, TIFF is what you have if you need to convert your raw data into a format that preserves as much of the raw data as possible for edits outside of the raw converter. So if you use Lightroom, DXO, C1, Bibble, etc. and then include Photoshop, or another pixel editor that accepts 16 bit images, in your workflow chain, you need to convert your raw data to an image. TIFF 16 bit preserves as much of the raw data as possible, especially compared to an 8 bit JPEG. Open that 16 bit image in your external editor, save as whatever you want, and then throw the 16 bit TIFF away if that's how you roll. There, your disk space hogging TIFF is gone!
The choice to go down the 16 bit TIFF road typically dictates whether or not you need to generate a 16 bit TIFF. If you shoot raw, make edits in your raw converter and print from your raw converter (or export for the web) then you will never need to make a 16 bit TIFF for anything. If you need to edit outside of your raw converter, you may find that, for certain images, 16 bit TIFF is the way to go.
Disk space is cheap. Some people do a considerable amount of image editing and preparation in Photoshop, where their file may have multiple layers, etc. They will save a full-resolution, multiple layer file as a "master" file and then make flattened duplicates of this master to repurpose it for print, CMYK press, web, etc. Not every mage may require this kind of storage and handling, but you can see why simply having the raw file around, with a sidecar file of settings, may not work for everyone's needs. If you have adopted the raw workflow, you need to understand that its demands on storage and processing are different than JPEG photography.
kirk