I actually see this as really being two topics: one is how much activity do dogs need (does it have to be every day?), and what type of activity (just walking placidly on a leash?). Another is, do dogs need to get out of the house if those activities can be done inside the house?
I would go so far as to say that daily walks are "necessary but not sufficient" for most dogs. So my answer is yes, dogs do need daily walks, but I believe that most need more than just that on a daily basis. Meeting a dog's needs is an important and often overlooked part of getting a well-behaved and obedient pet.
Many people don't realize that dogs' biological needs go beyond just food, water, shelter, medical care and clean living conditions. Social interaction - both with humans as well as other dogs - regular physical exercise, regular mental exercise, and regular drive outlets (of which there are several) are also real biological needs, not just nice-to-haves. A lot of behavior problems in modern pet dogs are not just due to lack of training but also to not having their needs adequately met and resulting in a chronically frustrated, behaviorally-unbalanced animal. At the very least, not adequately meeting a dog's needs will make obedience and manners training harder.
I do think most dogs need to get out of the house regularly, regardless of the activity (whether placid walking, or running, or playing fetch, going to obedience class etc.). Dogs who seldom leave the home or owner's property are more likely to develop territorial aggression. Dogs also have a need to sniff and explore because it is a very natural form of mental stimulation. Dogs also are social creatures and need to be around or interact with other dogs and people. All these are necessary for sound mental health. Dogs also need regular exposure to the outside world so they don't get overwhelmed with new sights and sounds when they finally have to leave the house to go to the vet or somewhere else. Thus I do think that most dogs need to get out of the house or off the owner's property regularly, everyday if possible, even if they do get vigorous play and training sessions at home. (if the area is safe for you and the dog that is.) They need to learn that the world is bigger than just their property if they are to be civilized members of our society.
However, I also think that most dogs don't get enough physical or mental exercise or drive outlets solely from walking placidly on a short leash. With some exceptions (like very small, or old, injured, or sick dogs), or unless the walks are very long (and I doubt most modern owners have the time to do that on a regular basis), most healthy and physically-able dogs need to run around and move freely and vigorously. Activities that allow the dog to use his brain and natural doggy instincts as well as his legs, are more satisfying and will more easily result in a satiated and well-adjusted companion at home.
This is also why I think a treadmill is less than ideal - it is certainly better than nothing at all, but the dog isn't using his brain or satisfying his natural instincts or moving freely, so it's pretty dull for the dog.