It's mostly a way of separating you from your hard earned cash, and then shifting some of the latter to the merchant's bank account.
There are some advantages to using nitrogen vs. ordinary air in tires, but they're entirely immaterial for ordinary uses. If you're a formula 1 racer or a jet pilot, then you may actually start seeing some real benefits.
I suspect nitrogen of the purity that would be used for tires is more frequently generated by removing the oxygen from the air with an oxygen concentrator than by liquifying the nitrogen. I may be entirely wrong, though. (It's doubtful in any case that they would liquify the oxygen in extracting the nitrogen, since that requires a much much lower temperature.)
