Blogs certainly generate web traffic and while I got more hits a few years ago, my blog still gets plenty of hits.
In my experience, blogs are excellent passive marketing. If you regularly post content of interest to readers of your genre - reviews of books, films and TV shows, essays on the genre or a part thereof, etc... - those posts will eventually attract attention and help to establish you as a trusted voice in your genre. This is particularly important if you don't write to the KU market and/or write in a niche whose readers are slow to trust indie books. Blogs are also good for collecting mailing list sign-ups.
Blogging is also good for making connections that lead to opportunities. I've gotten interview and guest blog invitations, a spot on the staff of a well regarded fan blog in my genre and was even interviewed on Canadian radio - all because of my blog. And yes, sometimes people will buy your books because they like your blog.
Of course, if you only post about your own writing (unless you are writing non-fiction and advice for writers) or if you only post links to this or that promo or sale, interest will be much lower. Plus, blogging takes time and you shouldn't do it, if you don't enjoy it.