Why are there so many programming languages?

Programming languages evolve and are improved with time (innovation).
People take ideas from different languages and combine them into a new languages. Some features are improved (inheritance mechanisms, type systems), some are added (garbage collection, exception handling), some are removed (goto statements, low-level pointer manipulations).
Programmers start using a language in a particular way that is not supported by any language constructs. Language designers identify such usage patterns and introduce new abstractions/language constructs to support such usage patterns. There were no procedures in assembly language. No classes in C. No exception handling in (early) C++. No safe way of loading new modules in early languages (easy in Java). No built-in threads (easy-peasy in Java).
Researchers think about alternative ways of expressing computations. This lead to Lisp and the functional language branch of the language tree, Prolog and the logic programming branch, Erlang and other actor-based programming models, among others.
Over time language designers/researchers and researchers come to better understand all of these constructs and how they interact and design languages that include many of the popular constructs, designed to work seamlessly together. This results in wonderful languages such as Scala, which has objects and classes (expressed using traits instead of single or multiple inheritance), functional programming features, algebraic data types integrated nicely with the class system and pattern matching, and actor-based concurrency.
Researchers who believe in static type systems strive to improve their expressiveness, allowing things such as typed generic classes in Java (and all of the wonderful things in Haskell), so that a programmer gets more guarantees before running a program that things are not going to go wrong. Static type systems often impose a large burden on the programmer (typing in the types), so research has gone into alleviating that burden. Languages such as Haskell and ML allow the programmer to omit all of the type annotations (unless they are doing something tricky). Scala allows the programmer to omit the types within the body of methods, to simplify the programmer's job. The compiler infers all the missing types and informs the programmer of possible errors.
Finally, some languages are designed to support particular domains. Examples include SQL, R, Makefiles, the Graphviz input language, Mathmatica, LaTeX. Expressing what these languages express in a general purpose language would be cumbersome. These languages are based on abstractions specific to their particular domain.
Without evolution in programming language design, we'd all still be using assembly language or C++.
As for knowing a functional programming: functional languages allow you to express computations differently, often more concisely than using other programming languages. Consider about the difference between C++ and Python and multiply it by 4. More seriously, as already mentioned in another answer, functional programming gives you a different way of thinking about problems. This applies to all other paradigms; some a better suited to some problems, and some are not. This is why multi-paradigm languages are becoming more popular: you can use constructs from a different paradigm if you need to, without changing language, and, more challengingly, you can mix paradigms within one piece of software.

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