My understanding is that it is mandatory for just the duration of the installation process. The installation process uses a GUI tool called a software deployment wizard (SDW) to execute the software installation process. So if you wanted to remove the tools needed to support the GUI process after the installation, my assumption is this would be OK.
However, I would need Angela to confirm this, and her response may be delayed as she is in the middle of working on another customer installation.
If you're doing a simple install which doesn't require a plan file or configuration (e.g., just SAS Foundation), you can get around the deployment tools' need for a windowing interface by using the -console option to the SAS Deployment Wizard and SAS Deployment Manager. See the SAS Deployment Wizard and SAS Deployment Manager 9.4: User's Guide for more info.
If you're doing a planned deployment involving configuration, then the deployment process does indeed require X11. It's not so much that it requires a windowing interface as the underlying importing of metadata packages relies on X11 libraries. It's possible to use Xvfb to get around the need for a physical display. Of course importing and exporting your own metadata packages after SAS has been deployed still rely on X11, so you'll need a display or Xvfb even after you're done deploying.
The import/export process is being changed to remove this dependency in the next maintenance release (9.4M3).
@Mark, just curious. There is a lot of graphical output these days. Those images can be prepared by a SAS session. Building graphs is mostly speeding by GPU's (Intel world). I have seen some dependencies with Unix requiring the Xvfb avoiding some hardware restrictions (lockings/waits). Are those dependencies also getting removed? (Any reference on those?).