If you need to compile templates on the client (e.g. passing a string to the template option, or mounting to an element using its in-DOM HTML as the template), you will need the compiler and thus the full build:
This loader pre-compiles a html template into a render function using the vue-template-compiler. Each html file is transformed into a function that takes a vue component options object and injects a render function, styles and HMR support.