Standing committees in the House of Representatives and the Senate allow bills to be closely examined by small groups of representatives or senators before they are brought to the floor for consideration by the whole body. "Standing committees consider bills and issues and recommend measures for consideration by their respective chambers."
Considering the large number of important functions carried out by the House of Representatives and the Senate, it would not be feasible for every member of Congress to review and consider every piece of legislation introduced for consideration. Standing committees group the hundreds of bills submitted during every session of Congress according to their main purpose, and allow the bills to be reviewed, debated, revised, and possibly "killed" by a smaller number of representatives or senators who have more expertise or interest in that particular area. This division of the load allows all bills to be considered by legislators who are knowledgeable about the bill's specifics; those legislators can then serve as advocates or opponents and advisors to the other legislators if the bill comes up for debate on the floor of the House or Senate.
The reason that there are so many standing committees in the two houses of Congress is that the federal government makes laws that cover such a huge variety of topics. Because it does this, it needs to have a lot of committees.
Committees allow the real work on bills to be done by people who can be relatively expert on a given topic. This means that not everyone in Congress has to try to educate themselves on every bill (they'd never have the time to do that). Committees, then, are very important because they let Congress get more work done on more topics.
If Congress considered fewer laws on fewer policy areas, fewer committees would be needed. As it is, there are many committees to cover the many areas of public policy that are legislated.