I have my problems with Chasidus. I am not a Chasid, never was, and never will be although I do have Chasidic roots. But the purpose of the following essay is not to bash Chasidus but to praise it. The conditions that led to Chasidus as a movement were such that without Chasidus, Klal Israel would have been severely diminished in numbers. I firmly believe that Chasidus saved Yiddishkeit. Here’s why:
About 200 years ago, societal evolution was such that after the reformation of the Church and subsequent period of enlightenment, Jews were finally allowed to participate in the benefits of society at large which of course included more social and geographical mobility leading to entrance into the world of university education. This freedom allowed great masses of Jewry who up until then were limited to the environs of the ghetto and the dictates of a cloistered and well controlled environment, to now experience freethinking and experiment with there own thoughts. This led to our own version of "enlightenment" in the form of Haskalah. Thanks in part to Moses Mendelsohn, although that was surely not his intent, a very strong pull away from observance amongst many Jews developed. Those who did not have the benefit of the higher Jewish learning of the "Yeshiva” were drawn to the pull of enlightenment that Haskalah represented. In some cases the best and brightest Yeshiva students were attracted to Haskalah.
Had there been the kind of mass Jewish education we have today a lot of this could have been prevented. We may have suffered some losses to Haskalah anyways but the vast majority of Jewry would have remained faithful to the beliefs of their ancestors. But the economics of that time prevented large scale formal Jewish education. There was only enough communal funding available for the most elitist of Yeshivos catering only to the best and brightest of Klal Israel. This left lots of Jews open to the draw of the secular world. Freedom of movement in and out of the Shtetel and allowing entry in to universities and some of the trades enabled many Jews to break the ties that bound them to Torah in the tightly structured communities of the Shtetel.
In short, Jews were beginning to leave Torah Judaism in droves at this historical juncture. The Yeshivos and community Rabbonim were nearly powerless to deal with the attraction of a new enlightened world which enabled many a poverty stricken Jew to leave his environs and go seek his fortune outside of the community both physically and spiritually.
Along came Chasidus. To the great masses of Jews who were unable to attend the Yeshivos and get the type of education that would enable them to withstand the arguments of enlightenment and Haskalah this movement said to them... It's OK, you don't HAVE to be a Talmud Chacham. You can serve G-d by doing good deeds and keeping the commandments as The Rebbes interpret them through the light of the Chasidic philosophy culled from Kabalistic sources. This will assure your place in Olam Haba.
The attraction was immense. People became Chasidim in droves, following a given Rebbe who would constantly encourage and reinforce the Chasid's devotion to HaShem becoming a beloved almost father figure, and the ultimate authority on all subjects. A movement which believes that the proper Kavanos are more important than the deeds themselves is bound to have a tremendous attraction.
An illustration of this is the famous story of the Am HaAretz who did not know how to read any Hebrew but wanted desperately to do Teshuva and Daven on Yom Kippur. He was told by the Bal Shem Tov (founder of Chasidus) to say the Aleph Bais (which this fellow evidently DID know) with as much Kavanah as possible and then told his Chasidim that it would be through the Zchus of this individual that their own prayers would be heard. What an attractive understanding of God's desire!
So, instead of being attracted to Haskalah, many were instead attracted to the simplicity of Avodas HaShem through Chasidus and its strong, charismatic leaders. Without Chasidus, Haskalah would've otherwise taken a very severe toll on Judaism.
Ultimately, Chasidus continued to carry Klal Israel for 200 years... all the way up to the holocaust.