I've gone a decade between services without ill effects. While not unheard of, a Rolex breaking is rare. What probably prompts more service than anything else is cosmetic issues. I've chipped a sapphire crystal before and while the watch was working fine I just couldn't look at that "beauty mark" on my watch's face anymore. The polishing folks at Rolex can take 10 years off the look of it. When you get it back from service, its like a brand new watch.
A watch is a mechanical marvel. It has gears and wheels, sliding parts, rotating parts, axles and spindles, synthetic jewels and bushings..
It just needs to be cleaned and oiled occassionally to function practically forever..
At some point, the metal-to-metal and pivot-to-jewel (say rock) wear is going to grind away the metal parts until nothing is left and it fails completley. It is going to happen....not might happen...but is going to happen..
I think that the guideline of 5 years is conservative and I will go 7 comfortably..
I also do not believe that you need to have this necessary cleaning and oiling done by an expensive RSC.. It can be done by any competent watchmaker for much less cost..
Since Rolex watches are mechanical, I would tend to have it serviced every 5 years so that you avoid grinding down the parts in the movement. You can obviously choose to wait until the watch stops, etc., but you will have an extra bill from having to replace worn parts in addition to the normal maintenance.
I'm of the 'if it ain't broke don't fix it' camp...
I've never serviced any of my mechanical watches so far (except for a warranty item), and the oldest is 12 years old or so. IMO, you don't need to service it as long as it's running normally. The key is knowing what the watch does on a normal basis and then having it serviced (immediately) when it no longer meets those. Yes, I may pay a little more, but if I've skipped 2 or 3 'scheduled' services I've still saved more then I spent.