User blog comment:Miskos3/Fairy Tail Episode 259: Tartaros arc: 00:00, Review/@comment-26997300-20151115021111/@comment-7418318-20151116081215

I think it was more about putting more fear in her.

With the sense of smell Erza still has a tiny connection to the world around her, without it she is fully and completely isolated (except possibly for her magical sense).