When we think of the use of magic in this excellent play we need to recall that magic was something that was taken seriously by people in the time of Shakespeare. Remember that even as late as the reign of James I, witches were still being burnt at the stake.
One question that is worth considering is how magic is used in the play. It seems doubtful whether there is a "good" use of magic - consider the way that magic seems always used to manipulate, imprison or influence other people. Another point to remember is that this play is completely unlike other Shakespeare plays because it is dependent almost entirely upon the use of magic - in other plays with a supernatural element, the characters still have free will. In The Tempest, the fate of all characters are decided by supernatural intervention rather than by characters or actions.
Of course, another point to focus on is that the island itself seems to be strongly enchanted. It was here the Sycorax was banished; the island is the home to Ariel and other spirits; and let us not forget that Prospero's magical talent only begins when he is exiled to the island and his powers leave him as he leaves. The enchanted nature of the island is made clear by Caliban in a speech that shows his wonder at what happens on the island:
...the isle is full of noises,
Sounds and sweet airs, that give delight, and hurt not.
Sometimes a thousand twangling instruments
Will hum about mine ears; and sometime voices,
That if I then had wak'd after long sleep,
Will make me sleep again...
Magic is therefore an incredibly important part of the setting of this play, focussing on the location of the island. Likewise magic is rarely used benignly and it also is an instrument that deprives the characters of free will. Hope this helps!