For many of us patter is an indispensable tool. It is part of the act and the framework, within which we set the songs. In my busking show, I was quite frequently able to build crowds more by talking than by playing. To make a crowd sing and clap along on the street, you have to build it up a bit like an Evangelist meeting. The same can be true of other gigs.
I have rarely got patter right at the first attempt. Some of it is ad lib, but some of it needs as much practice to get right as performing the songs. It gets adapted to circumstances according to the setting. It tends to take on its own life once it is "out there".
The performers have to be able to guess whether the same lines have been trotted out a hundred times before when they are playing a relatively small scene. If I were playing in the UK, for instance, I would avoid using anything, which sounded like a Mike Harding or a Fred Wedlock line. Everyone has known those gags for over thirty years. Those same gags could come across as very fresh somewhere else. I'd also like to make the point that patter is not necessarily the same as just telling jokes. Out of context, my patter is about as funny as a tree falling on your car. I am crap at telling jokes, but patter does seem to work for me. At the end of the day only people are funny and not the actual gags themselves. I can prove it. I can tell you the funniest gag in the world so you do not laugh…
If patter comes over as part of your own stock of storytelling, it is an important enhancement to the setting of your songs. It can also provide a very welcome counterpoint to your darker material. It is like anything else in your performance. You do not have to do it, but if you can do it well, it will make your show better.