Why The Capacitor is Needed
http://students.fct.unl.pt/users/ejr/ignite.html
Those same principles of inductance create a kind of paradox, because when you stop feeding juice to the coil, that is, when the points open and the magnetic field collapses, inducing the 30,000 volt current in the secondary, it also induces a current in the primary as well! It's not very much because there are only a few windings in the primary, but it's enough to jump a small air-gap, such as the one between the just-opening points in the distributor. That tiny spark is enough to erode metal away from the points and if there is any oily vapor inside the distributor, any
oil on the points will become carburized; you'll 'burn' the points.
To keep your points from burning as they open and close, you'll need to provide something to absorb that spike of counter-current, something more attractive, electrically speaking, than the air-gap between the points. That's a job for a capacitor. To the counter-current, the capacitor looks like a black hole, an attractive one. The spike of current dives right in. And the points don't burn.
The points have a tough job, switching up to eight amps of current many times per second at highway speed. Indeed, as engine speed increases the efficiency of your ignition system decreases, thanks to heating problems and fundamental electrical laws. This declining efficiency has a serious effect on your spark voltage and results in poor high-speed performance, incomplete combustion and a host of other ills.