The prevalence of sleep deprivation is evident in our massive market for coffee and other stimulants. Although our mind requires rest to maintain peak functionality, we make do by relying on stimulants to simulate wakefulness. A regular lack of sleep results in weight gain and reduced decision making ability. In extreme cases sleep deprivation can be terminal, but thats only under extraordinary circumstances.
Despite the obvious negatives, there is a noticeable advantage to the sleep deprived conscious state. For creative work, the mind becomes much less self inhibited. The same cognitive forces that diminish our critical reasoning, may also allow easier access to our subconscious and imagination.
My personal experience of this effect is an improved sense of creativity, immediately following an interrupted sleep cycle. While many ideas I cook up are terrible, I'm much less likely to instantly discard a new opportunity. I'll spend more time exploring the potential for a tool or application because of a shift in my perception. Normal cognitive biases that blind me from a novel solution are temporally diminished. But these same biases also prevent a large fraction of "noise" ideas from ever reaching my attention, so there's a tradeoff. Cognitive biases act as a filter or barrier to the storm of terrible ideas that never receive more than a cursory thought. Distraction appears coupled to the creative boost we can harness from altered sleep.
References:
Sleep Deprivation affects decision making