The battery pack for the Prius is roughly $3,000.
The transaxle, if it fails is $3,700 just for the transaxle, labor for replacing it is approximately another $1000.
Depending on what exactly the extended warranty covers, it may be a good buy or not a good buy.
The thing I would check for, is to make certain exactly what the extended warranty covers.
If it covers the high voltage battery pack, drivetrain, electrical and engine, then it may pay for itself over the life of the extended warranty.
What shops does the extended warranty require you to go to?
Is it a Toyota extened warranty or is it some aftermarket extended warranty.
Don't assume it is a factory extended warranty. Be certain of it.
Any time you deal with an aftermarket extended warranty (or for that matter, any extended warranty), read all of the fine print and know exactly what it covers. Make the salesman show you exactly where it says it will cover all the things they say it will.
Know what the deductible is and if they cover things like roadside assistance, towing and car rental.
You don't want to be stuck into an extended warranty only to find out that they embelished it a little.
So, to answer your question of do you need an extended warranty, it is a tough call.
I have seen people go many years without needing them, but have also seen people who have been outside the manufacturer's warranty eating a $2-$3,000 repair bill.
An extended warranty gambles on the fact that you will have at least one major repair needed between the manfuacturer's warranty and the end of the extended warranty.
Another thing to take into consideration is how long do you plan on keeping the vehicle.
I know that this doesn't help you to make the decision on whether to get it or not, but gives you some things to consider.