IMO, hiking Diamond Head is the most over-rated attraction we have on Oahu. It's a crater with dead grass, weeds, a lot of dirt, and a lot of sweaty people.
I lived on Oahu for 3 years, and have visited about a dozen times since moving away. Not once did I do the hike, nor did anyone who came to visit. So to answer the OP, no it isn't a "must do", but whatever appeals to you is what you should do!