Since (I don't think) practice rounds caount against your average, Mulligans would be a good way to practice shots...i/e say your 150 out to a 25 foot elevated green, you "think" you have the yardage right, but mishit it...would be real nice to know what would happen if you dinged it and not have to run through another 18 holes to find out.
Same true for putting/chipping/etc....
I think Mulligans would eliminate the the need for practice greens and a driving range.
Heck, when I go out hacking by myself, and even with a friend and we're just out to have fun, lot's of times...even though we count the first shot...we'll drop another ball and see "what if".