Argument FOR: It's a small kind consolation for people who get rekt by market conditions and may encourage users to re-open positions on Nerite. Thus encouraging growth. Plus it's a nice thing to do when Nerite users are having a bad time.
Argument AGAINST: No, it will encourage and incentivize bad behavior. The protocol is healthier when there isn't liquidations or risk of bad debt. Plus, this will slightly dilute the shells of other users' who prevented their own liquidations.