Two crew Electra's are just fine 98% of the time but when the work load is high and a technical problem rears it's head you are going to need the engineer or things will get forgotten. As we all know that is when accidents happen.
It is interesting that two of the three UK opperators did not take away the flight engineer when they could have saved a lot of money by doing so, I can only conclude that they had flight safety reasons for doing so.
As to the comment about the FE being the sorce of CRM problems, this is one of the strangest comments that I have seen on these pages over the years, I would love to see the hard evidence to back up that statement.