To me, all kinds of 'states' have their justification, it just depends on the specific purpose in each case.
Mint Boxed: For the authentic, museum-like feel of stepping back in time and admiring the achievements of the past, exactly as they were, you can't beat a mint/boxed model. It really is like 'going back'. Unfortunately it's also prohibitively expensive, so for most of us, it's really not an everyday-option, but something reserved for a very few selected favorites from our childhoods - for me, this was something like the Dinky 179 Opel Commodore. I don't regret for a single moment that I bought it, but it's one out of just a very few.
Restored: Great for creating an overview of larger series, collections, eras. What models dod Corgi release in 1967? What did they look like? What features did they have? Illustrating this with mint/boxed models would cost an arm and a leg and playworn examples would often give the wrong impression, since many features would have broken, extras missing etc. so you don't get the correct view of the play value. Also, one shouldn't underestimate the 'emotional power' of seeing a wreck brought back to full glory. I know I truly enjoy some of the examples shown here on TC.
Code 3: If you collect something specific, like cars in a certain livery, you'll be almost certain to find that some real-life cars in that fleet are unavailable in miniature... code 3's to the rescue! It can really mean a lot to finally be able to fill a gap. Another great use is for the "what if's" - models that we know were planned in a certain way, but came out differently, a prime example being all the models made in the "wheel transition"-period with the switch from old style wheels to whizzwheels/speedwheels etc. - isn't it great to be able to see what a certain Corgi model would have looked like with the Golden Jacks wheels originally intended? Code 3 is also ideal for creating a miniature replica of your first 1:1 car, and so on. Or what about just good old fashioned joy of creating small 'pieces of art'... modyfying to your hearts content, choosing any color you like, painting details that the original didn't have, replacing primitive wheels with better ones. There are so many things that can be done and tc has shown us countless great examples.
The question of 'losing value' through modification, is really "in the eye of the beholder": what do you want from a particular model? what are you trying to show? If the modification takes you closer to your own personal goal, then the value will increase with the change, at least it will to you, and that's what matters here. Whether or not the world agrees is totally irrelevant as long as the model stays in your possession.