That is something that we debated for our upcoming remodel. It is certainly not a must have. There are plenty of kitchens out there with particle board (some manufacturers call it furniture board) sides supporting granite tops. Water is no friend to plywood or to particle board. In the end, we decided to save the money and put it towards other features, like pull outs.

If you do go with particle board sides, make sure that any exposed sides of the cabinets are either plywood or have had a veneered panel applied. That way you have real wood visible all on the outside, instead of wood grained melamine.

Completely unnecessary. If the cabinet passes the KCMA testing, it passes with basic construction, which is furniture board. It's just as sturdy as plywood in compression. It's not in deflection, but that's not a concern with cabinet boxes, just the shelving longer than 36". Any moisture event that would damage a particle board cabinet will damage plywood as well. Plywood delaminates internally and it's less visible, but if the layers are no longer laminated, it's not providing structural integrity even though to laymen's eyes it appears to be less damaged than a similarly wetted furniture board cabinet would be.

We paid for all plywood construction in our last house. We didnt this time. We decided it was a waste of money that we could be better off spending elsewhere.

I agree with everyone who's spoken up so far - plywood is not a necessary "upgrade." The "upgrade" is mostly a ding to your checkbook.