It's also one of DS9's few ensemble episodes, particularly in the latter seasons.
Yeah, I think this episode and Badda Bing
are mostly justifiable from that point view: a chance to get the main ensemble together for some light-hearted fun, let us see them together as an extended family for a while before the show enters the late-season war arc and the characters all eventually go their separate ways.
Was it absolutely necessary to do this? Maybe not, but I think it has its place.
One reason I really like season two is the fun group dynamic, with the main cast playing off one another, that tends to get lost a bit in the later seasons. You tend to get a sense of the station as a community at that point in the show. Maintaining that was understandably not a huge priority, but it is good to get everyone together, if nothing else to remind us of the friendships that have been built, and will soon be torn apart.
My qualms with both episodes really are the holodeck setting of both (I think at least one of these light-hearted episodes should have used the main promenade/station as the setting, and/or Quark's bar). Or maybe we only need one of these episodes, not both.
I also agree about the over-indulgent quality, though the baseball thing at least has been a well-established interest of Sisko's from the beginning.