Eventually they will outgrow needing them so much....but that doesn't mean they don't need (or want) them at ALL. My daughter slowly stopped carrying Pluto around in the car everywhere (including buckling him in his own seatbelt) but still had to sleep with him. Then it didn't have to be HIM, she would rotate through her collection of stuffed dogs. She's 10 now, and got a pillow pet for Xmas 2 Xmases ago... that's about when she stopped sleeping with a 'lovey' every single night. Now she just uses her pillow pet, and takes that on trips with us, lol. One day she'll put that away too, I'm sure. Her stuffed dogs are all in bins that slide under her bed. She still knows all their names.
Our son had a stuffed snowman that he slept with every night from the time he was about 8 months old. He got left behind at a hotel once, but we noticed the next night (duh!) and called the hotel. The housekeeping manager was on duty and located him and mailed him back to us. After that, he stopped taking him on trips. He was probably about 7 or 8 then. Around age 9, he started putting him in the closet when other kids were at our house (he didn't want them playing with him, so he put him up on a shelf tucked into the back of his closet, hidden). Eventually, he just one day didn't take him back out of the closet. He's still up on a high shelf in there somewhere. My son is 13, but I'm sure he knows EXACTLY where "Mr. Snowman" is. Probably the ONLY thing he knows exactly where is, too.....
He's a pretty sentimental kid. Not just about that, but other things, too. I would not be surprised if he takes him with him to college. Or if he decides he is 'safer' left at home. Nor would I be surprised if he collects him from home when he is grown and gets married and has his own home..... but I don't think he'll "share" him with any kids he might have. lol