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2 Remove "abstract" version of the problem as rrenaud has pointed out a situation in which it's a trade-off.
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Imagine a a tabuleau which contains both Contact Specialist and Drop Ships, and my hand contains Reptilian Uplift Race and at least one other card, or more generally any other setup which contains both a red to black conversion ability and a total positive military strength in the tableau and a military world in hand.

Is there ever a situation (including cards from any official expansion) in which it would be advantageous to use the red to black conversion ability to settle the military world, thus spending one or more cards, as opposed to simply conquering the military world?

Or the same problem put in a slightly more abstract way: is there every a situation in which having extra cards in hand is a disadvantage?

Imagine a a tabuleau which contains both Contact Specialist and Drop Ships, and my hand contains Reptilian Uplift Race and at least one other card, or more generally any other setup which contains both a red to black conversion ability and a total positive military strength in the tableau and a military world in hand.

Is there ever a situation (including cards from any official expansion) in which it would be advantageous to use the red to black conversion ability to settle the military world, thus spending one or more cards, as opposed to simply conquering the military world?

Or the same problem put in a slightly more abstract way: is there every a situation in which having extra cards in hand is a disadvantage?

Imagine a a tabuleau which contains both Contact Specialist and Drop Ships, and my hand contains Reptilian Uplift Race and at least one other card, or more generally any other setup which contains both a red to black conversion ability and a total positive military strength in the tableau and a military world in hand.

Is there ever a situation (including cards from any official expansion) in which it would be advantageous to use the red to black conversion ability to settle the military world, thus spending one or more cards, as opposed to simply conquering the military world?

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Is it ever a good strategy to discard cards in Race for the Galaxy?

Imagine a a tabuleau which contains both Contact Specialist and Drop Ships, and my hand contains Reptilian Uplift Race and at least one other card, or more generally any other setup which contains both a red to black conversion ability and a total positive military strength in the tableau and a military world in hand.

Is there ever a situation (including cards from any official expansion) in which it would be advantageous to use the red to black conversion ability to settle the military world, thus spending one or more cards, as opposed to simply conquering the military world?

Or the same problem put in a slightly more abstract way: is there every a situation in which having extra cards in hand is a disadvantage?