This article is from the Feline Leukemia (Cats) FAQ, posted to rec.pets.cats newsgroup. Maintained by Erin Miller with numerous contributions by others.
The answer to this question all boils down to a risk/benefit assessment. If you live in a high-rise, do not plan on moving in the next year, and do not plan on exposing your cat to other cats (such as getting a new kitten, or temporarily housing a stray), then there is really no need to get the cat vaccinated. If it is somehow possible for your cat to make it to the outside world, whether it be because of a break-in, or a landlord who forgets to close the window they just fixed, or a visitor doesn't realize the cat is not allowed outside (all of which are real-life cases of people I know whose indoor-only cats have gotten outside) then your cat is at SOME risk. Many people who lived through Hurricane Andrew or the LA Earthquake can tell you that some of their indoors-only cats ended up on the street for days. Fortunately disasters like these are infrequent, but the point is accidents can happen. In the few hours or days that your cat is outside it could come in contact with an infected cat, and it is better to give your cat that 75-85% boost to its natural resistance.
But, some people feel the risk of adverse reaction and possible fibrosarcomas from vaccinating are not worth the risk if the cat is not likely to go be exposed to FeLV+ cats, even if it did get outside for a short period. What YOU as the cat's owner (not your vet, not your cat's breeder, not your friend of a friend who knows a lot about cats, and not someone who wrote something you read on the internet) must decide is how much risk is there for your cat getting out and being exposed, and is that risk worth the other risks associated with the vaccine?