Why should one develop compassion? Maybe a strange question, because for some people it's obvious that you should be compassionate. I'm just interested in knowing why.

Hatred is unskillful, but why should one develop compassion instead? Why is "not hating" not enough?
One reason is that compassion softens self-boundaries the most.

Hatred strengthens boundaries of the self.  Someone does something contrary to what we value, and our emotional reaction not only strengthens our attachment to this value, but our attachment to ourselves, as we identify more strongly with us vs. the other (exemplified by that person).

Not hating (letting go) softens this for obvious reasons.

Compassion goes further, for to positively work towards the benefits of others (especially those we would normally hate) is to further soften our self-boundaries, by putting our time and energy into their welfare, and in a way, to start thinking of their welfare as our welfare (in a way, this is what caring is).

I think the best explanation for compassion's role in softening the boundaries of the self doesn't come from Buddhism but from... Einstein.  Here's a very nice quote of his:


  A human being is a part of the whole, called by us "Universe," a part
  limited in time and space.  He experiences himself, his thoughts and
  feelings as something separated from the rest, a kind of optical
  delusion of his consciousness.  This delusion is a kind of prison for
  us, restricting us to our personal desires and to affection for a few
  persons nearest to us.  Our task must be to free ourselves from this
  prison by widening our circle of compassion to embrace all living
  creatures and the whole of nature in its beauty.  Nobody is able to
  achieve this completely, but the striving for such achievement is in
  itself a part of the liberation and a foundation for inner security.


Now you may not agree on how completely we can achieve this, but the central idea here is that compassion relaxes the boundaries of the self, expands our sense of one-ness, and to the extent we can express compassion, we are liberated.