Well it's really up to the hosts discretion. You don't ever want a modkill to benefit the players team, but it's really unfair if an absolutely dreadful player signs up that isn't even taking the game seriously and gets himself modkilled by being dumb. The town just lost a player and also lost the whole day, which can be very bad for them.
In Newbie 8 for example, Murnane got himself modkilled in a stupid way and the host decided to keep the day going because that would just have been totally unfair to town to just end the day on that.
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The batman villians all seem to be one big joke that batman refuses to laugh at - SantaRPG