They do live in a heirachy. That's what te colors and displays are for - the big males will have the biggest, highest best territory, the less dominant males will stay lower down.
They have a lot of "social" interaction - but it's not close up - most of their communication is from a distance. That's why the colors, display etc matter. Chameleons with a bigger casque might be simply more attractive to the females. Usually, useless, sexually dimorphic(males are different than females) structures like that have more to do with sexual selection than anything else (cause if it was useful, females would have it too).