Don't worry so much about insulting Martial Man, he's a tough guy, he can take it. (This is, obviously, a joke
)
How so to which part? I guess I should just answer both.
First, dead nerves and thick bones could lead to an eventual loss of range of motion and/or continual pain. This is especially true for thickened bones in the joints as the cartilage has taken more wear and tear than it is normally accustomed to and so you get earlier onset of things like arthritis. The continual pain comes in a similar way of the so-called phantom pains from an amputated limb. The brain still have the neurological structures to deal with the area, but the brain gets no input from the area. Sometimes the brain interprets this lack of signal as pain simply because it realizes that 'something is wrong' and it wants to draw attention to it.
As per how useful it is: if you are an amateur martial artist who makes their living as a garbage man, fireman, engineer, teacher, or what not, odds are you will not get into many fights in your life. Now, how many of these fights are going to be won because you happen to be invulnerable to a kick to the shins, which would not have been won by you simply being trained in a martial art? Now, you have said that conditioning your shins in essential to fighting a MTer because they tend to have a lot of power and they tend to like low line kicks to the shin. To this extent, I will agree. However, how often are you going to get into a real fight (i.e. not a sparring match, competition or friendly fight) in the street? Odds are, almost never simply because you and your opponent will find the common ground of martial arts and the 'real fight' will become a 'friendly fight' where you just want to see who is better, not actually hurt the person.
Summing it all up: High long term costs for a low short term benefit is simply not my idea of a good decision.
However, if you are in MT (or any other art for that matter) you will gain some conditioning through you simple sparring exercises. This bit of conditioning that you get is probably adequate for you to deal with
most of the stuff you will encounter so long as you train with a good amount of intensity.