I've had showdead=yes for a while and haven't seen anything that made me suspect live banning was employed for pleasure by Hacker News moderators. Admittedly, I'm not inside their heads and have only paid attention to a small fraction of dead posts.
One difference between regular banning and live banning is that the banned person is kicked out of the community with a regular ban, but not with a live ban. A live ban mitigates the effects of problematic behaviors on the community while still allowing the person behaving problematically to retain their identity and participate in ways that aren't problematic: i.e. people who are live banned can remain part of the community.
Because the live banned person remains within the community, there is an opportunity for the community to recognize unwarranted live bans based on actual exhibited behavior within the context where it is relevant. Anecdotally, I've seen unwarranted live bans lifted in real time.
I've also seen members of the Hacker News community who have benefited from keeping their identity within the community over an extended period of time while continuing to exhibit problematic behaviors. People may look at that situation and see something different, I see live banning as a highly compassionate way to solve the corner cases that need high levels of compassion.
From a practical standpoint doing regular banning "right" with formal notification, explanation, and appeals processes requires a non-trivial moderator time and energy. If most bans are justified, that means all that energy is wasted on accounts that the owner doesn't value and accounts that the owner values solely as a conduit for argument and/or insult.
Even in cases where the person values their account as an identity within the community, formal processes are an escalation. The most likely proximate cause for needing to limit that type of account is the manner in which disagreement is expressed. Creating a context that threatens identity is unlikely to suddenly produce better behavior in regard to disagreement over a sanction already enforced.
Regular banning is confrontational. One of the ways Hacker News differentiates itself from other sites where people type into boxes is by discouraging that very behavior. Lunch at Cafe Hellban comes at some cost to the community, but I believe it's lower than the alternatives.