The term "hero" comes from the ancient Greeks. For them, a hero was a mortal who had done something so far beyond the normal scope of human experience that he left an immortal memory behind him when he died, and thus received worship like that due the gods. Many of these first heroes were great benefactors of humankind: Hercules, the monster killer; Asclepius, the first doctor; Dionysus, the creator of Greek fraternities. But people who had committed unthinkable crimes were also called heroes; Oedipus and Medea, for example, received divine worship after their deaths as well. Originally, heroes were not necessarily good, but they were always extraordinary; to be a hero was to expand people's sense of what was possible for a human being.
Today, it is much harder to detach the concept of heroism from morality; we only call heroes those whom we admire and wish to emulate. But still the concept retains that original link to possibility. We need heroes first and foremost because our heroes help define the limits of our aspirations. We largely define our ideals by the heroes we choose, and our ideals things like courage, honor, and justice largely define us. Our heroes are symbols for us of all the qualities we would like to possess and all the ambitions we would like to satisfy. A person who chooses Martin Luther King or Susan B. Anthony as a hero is going to have a very different sense of what human excellence involves than someone who chooses, say, Paris Hilton, or the rapper 50 Cent. And because the ideals to which we aspire do so much to determine the ways in which we behave, we all have a vested interest in each person having heroes, and in the choice of heroes each of us makes.
Again,