I play by ear and chords too, but being able to jot something down, or read something someone else has written down, is as useful to me in music as it is in English. Literacy is just plain practical.
Practical and useful, yes! Stunting development is something different. I do know how to read sheet music, but I’ve never practiced it to be fast enough to sight read. I’ve never felt that this has stunted my development - if it had, I probably would have picked up speed naturally.