You need the logarithmic (chromatic) scale to produce the harmony and play chords.
I dont think so. Harmony is about symbiotic (or "anti" for the lack of a better word) relationship between pitches. So for chords like major-triads, it work the best with natural tuning rather than chromatic. For example a major chord with tonic, a perfect(?) third (i.e. 5/4) and a perfect fifth (i.e. 3/2) is way more harmonious than a equi-tempered third and fifth. When people did choir music in church many centuries ago (where 3 voices combined etc.), which IIRC is how all this chord business started, this is how it was. All natural frequencies, no chromatic. Early instruments probably matched it.
Nowadays, of course in instruments it is mostly equi-tempered and the human preference can actually be conditioned to go otherwise (experiments have proven this). I mean that when people hear the equi-tempered third long enough in the western context, many think that is a better third than the natural
But yes, I think the fret positioning may not aid natural tuning. However there *are* folk bands who play only natural scale - I think they may have special instruments.
But anyway, I was *not* arguing that the equi-tempered note is as good as natural note in carnatic context and people shouldnt complain. I did not think that was your point in your earlier post. There are no arguments w.r.t that.
However, my point is that presence of the equi-tempered G3 and a equi-tempetered fifth in a major chord that is say played along with a carnatic melody that say hovers around sa is actually not that more jarring compared to the presence of pa in the tampura during Sriranjani

.
That also makes it clear why U Srinivas and Prasanna are geniuses.
Yes they are genuises but its not like they are weaving some secret magic to completely avoid chromatic frequencies altogether. No, it instead points to the fact that *even* with chromatic frequencies ordained by the frets, one can output pretty authentic carnatic stuff (atleast for most if not all ragas?).
Prasanna as far as I know does not use custom guitar with custom fret placement. And he uses slides, pretty much only slides (this is obvious from his dvds, and he also has openly said so in an interview). So he is obviously doing slides between frets which again, are geared towards those chromatic frequencies. Now do you finds the result to be "carnatic enough" ? Then chromatic frets arent that bad.
Arun