Well, almost never.
The purist in me wants to recommend that nothing should ever be obliterated. However, my pragmatic side prevails. There are situations where obliterate is not sinful.
However, obliterate should never be used to delete actual work. Don’t obliterate something just because you discovered it was a bad idea. Don’t obliterate something just because you don’t need it anymore. Obliterate is for situations where something in the repository absolutely must be removed, usually because of legal issues.