The sign of peace is not required at all times, but it is not strictly "optional" either. The Missal at this point says, "Then, if appropriate, the Deacon, or the Priest, adds: Let us offer each other the sign of peace." Some people, then, have argued that the phrase "if appropriate" makes the sign of peace completely optional at the priest's whim, because the priest can simply decide that since he does not like the sign of peace and doesn't think it should have been introduced into the Mass in the first place, it is never appropriate.
I disagree that the sense of these words is intended to give complete latitude to the celebrant's personal preferences and caprice. If the intention of the Missal were to make the action really optional, then suitably permissive language would have been used, as it is elsewhere in the Missal to indicate true options. Moreover, the importance of the sign of peace has been stressed by the Holy See. In 1975, the Congregation for Divine Worship, which gives authoritative rulings on liturgical questions, was asked whether priests can omit the sign of peace because they have people hold hands during the Our Father instead.
Can the practice, flourishing here and there, be permitted, by which the participants at Mass, instead of making the sign of peace to one another at the deacon's invitation, hold hands while the Lord's Prayer is sung?
RESPONSE: To hold hands for a long time is, in itself, a stronger sign of communion than of peace. Furthermore, it is a liturgical gesture introduced spontaneously but on private initiative: it is not found in the rubrics. Nor can it be understood what reason there could be for suppressing the sign of peace at the invitation "offer one another peace," which holds such great significance, grace, and Christian spirit, so as to introduce a different sign, of lesser signification, at another moment in the Mass. If such a substitution is under consideration, it is simply to be repudiated.
Were it true that the sign of peace is a purely "optional" thing that the priest can eliminate just because he doesn't like it, this would have been the perfect time to mention it -- to point out that the sign of peace is an irrelevancy that can always be suppressed. Instead, the Congregation for Divine Worship signals almost the exact opposite: that it is a gesture holding great significance and grace, and that even introducing a lesser sign would offer no justification for eliminating it.