Extra Lives are usually only needed when you are low on them. They are very useful when you are in team mode, though. Of course, you can't get more than 5 lives in all modes. Technically, you get 6.This is not much of a tool if you are mining for one in a ship that can't mine well. For example, Shadow X-1. This ship is pretty standard when battling, but it is horrible at mining. In fact, I think it's the worst miner in the whole game! Okay, maybe not in all of the mods, but it is still pretty bad. I myself don't use this ship very often. Extra lives may not be as important if you are in Invasion, Battle Royale, Racing, PDM, and ACW.
Extra lives, in my opinion, are most important in Team Mode and U-Series. It is super easy to die when you are in these game modes. Some people have strategies that include extra lives. Some players build up on lives to have something to fall back on. Extra lives can be important to only some players, game modes, and strategies.