For hundreds of years, storytelling was a way for cultures to maintain their history. If a village was large enough to be able to support a scop (storyteller), that person would record important events, births, battles, etc. Strangely enough, for such a time-honored position within the community, the job was not limited to men: a man could pass the job along to his daughter.
The traveling scop was a source of entertainment, especially in a castle, when the nights were long and cold. If a traveling storyteller was worth his "salt," he would have enough stories and/or songs to last him (or her?) many nights, ostensibly providing for his food and shelter until he ran out of "material."
This job and its importance is described in John Gardner's Grendel, with the presence of the Shaper, an old blind man who can "shape" the way people see and remember things through his words. Even in the epic poem Beowulf, the grandeur of storytelling is evident in the grandiose way the story is told, like an exciting story of war and valor, told by a scop.
And, finally, in today's world, storytelling can be the passing of stories of our childhood or the lives of our parents and grandparents, etc., which not only preserves the lives of those in our past, but promotes the use of imagination, something that I believe is in jeopardy with children who become so entrenched in the world of technology: game playing instead of "pretending" is a real loss in today's society.