Firstly, I do outline and I have found it has saved me a lot of time editing and fixing problems in the characters/plot because I've worked out the main points first. That to me is the best reason of all to outline.
Secondly, I think most writers should outline. Working out your direction before you start off, especially on a major project, makes a great deal of sense.
Thirdly, no! For a flash fiction piece, I once wrote one sentence as I knew my story idea could go in one of two directions and naturally I wanted to go with the strongest idea. By writing down that sentence, I could then see what was the strongest idea and I went with it. For short stories and novels, I obviously outline more.
I don't outline every single thing. For characters, I look at what drives them (as that reveals their attitudes to life, to others etc). For a story I want the beginning and end and a point in the middle which will usually prove to be the turning point. I deliberately allow room for my imagination to kick in and have found when ideas come to me as I write the story, I can jot them down, look at my outline, work out where they'd fit in and away I go.
I will sometimes outline a setting to help me get a clear picture of it in my head. For a setting I already know well, I may look at what might surprise me about it and see if I can be surprised by it.
Outlining is a tool. How you make use of it is up to you but it is good to have that tool in your writers' toolbox. Use it to serve your writing. I've found it pays off.