If you scan for web display, contact printing is more than fine. I have one from a 4x5 negative attached to this thread, and I think it's good enough up to about 1,000 pixels in the long dimension.
If you scan a contact print to make a larger print, you will lose quality, because paper does not have good resolution for that. That is unless you make the prints the same size as the contact prints, or smaller.
If you make digital prints larger than the contact print, you are better off scanning the negative. But the beauty of the contact print is that you have a print that is a reference, which you can use as a guide when you scan the negative. That can be really helpful.