Ah life-stealing, how I despise thee. Strictly a co-op feature, life-stealing would occur when one person had completely run out of lives. This usually meant diddly squat however, as it was possible to borrow a life from the other player (provided they had one). This was something that was most popular in the side-scrolling beat-em-ups during the NES and SNES/Genesis eras. It was also likely the source of many strained relationships and fights.
I'd say that there are two types of life-stealing: the kind that you don't care about, and the kind that makes you want to punch babies. For the first kind it makes sense for someone to take your life. Perhaps you'd been hoarding the extra lives, going on a first come-first serve basis. Your buddy loses one and since you have plenty of extras, he might as well go for it. Another example is your buddy's died out and your facing a tough boss. An extra life and an extra player may be what is needed to overcome. Another and probably the best reason for life-stealing is to satisfy the significant other.
Now for the other kind. For example, you're paired up with your retarded younger brother who just happens to suck at the game. He loses all his lives relatively early, and what does he do? Hits the start button and steals your life, which just ends up being a waste because he dies within the next 5 minutes and takes another one.
And now for the worst case of life-stealing imaginable (well aside from SMW when you leave the room and come back with all your lives stolen). With just one extra life remaining and being low on health, your buddy decides to be the ultimate douche and take it. Leaving you with no extra lives and on the brink of death as he decides to tank his life and die. Nothing my "friends" did raised my ire more than this as a young lad living precariously as Raphael. To me this was the ultimate dick move.
So why is it such a guilty pleasure if it pissed me off to no end? Because it's damn funny. I myself have giddily participated in life-stealing just to piss off my friends, waiting till they had one life left then pressing start just before running out of the room for safety
"Sorry" was usually his line after he'd accidentally stolen one of my lives. "SORRY!" was what he said after he did it again (accidentally).
He died, shortly thereafter, under mysterious circumstances. I bet he's wishing he could press the start button now. Bastard.